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E-Commerce Websites Can Never be 100% Fake Proof, Says RedSeer CEO

A News18 investigation, on Wednesday, found that spurious manufacturers and counterfeit sellers are using loopholes in the Information Technology Act to their favour and making unaccounted money from the same. Meanwhile, online retailers are shrugging off responsibility by claiming to be intermediaries.

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Updated:December 28, 2017, 1:59 PM IST
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E-Commerce Websites Can Never be 100% Fake Proof, Says RedSeer CEO
A few years ago, in 2013, a Flipkart customer received a pair of stones after placing an order for an iPod. In October 2014, a Snapdeal customer received a bar of soap after ordering a Samsung phone.
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New Delhi: In a major expose, CNN-News18 on Wednesday unveiled popular e-commerce websites duping consumers by selling them fake goods at the price and guarantee of originals. Management and advisory firms state that online markets will forever have a certain percentage of counterfeit products.

“Perennial problem is can we make e-commerce 100% fake proof? No, that cannot happen. It has not happened in China, it will also not happen here in India in the next few years as well,” said Anil Kumar, CEO, RedSeer Management, a management and advisory firm.

A News18 investigation, on Wednesday, found that spurious manufacturers and counterfeit sellers are using loopholes in the Information Technology Act to their favour and making unaccounted money from the same. Meanwhile, online retailers are shrugging off responsibility by claiming to be intermediaries.

The investigation carried out by a team of brand investigators and News18 has revealed that more than 60% of the sports goods available online are fake. In the case of apparels, at least 40% of the listings are by duplicate manufacturers.

“There cannot be any explanation to these things. But as we saw in other countries like China as well, when the e-commerce market was growing with Alibaba, we saw a significant amount of fake products in the market. But then over a time, Alibaba tightened the screw. Still I think there are a certain number of fake products which are being sold in the Chinese market as well,” added Kumar.

The latest instance of imitations on e-commerce platforms is, however, not the first time that online retailers have drawn flak over products sold.

A few years ago, in 2013, a Flipkart customer received a pair of stones after placing an order for an iPod. In October 2014, a Snapdeal customer received a bar of soap after ordering a Samsung phone.

“Indian e-commerce market would be approximately 18 billion dollars in terms of gross merchandise value sold from these websites- a good deal of this is coming from flipkart, amazon, paytm and so on.

These large players are controlling quality better as compared to the long tail. Does this guarantee they would not have fake products? No. Companies like Amazon can have fake products as well. It is almost impossible for flipkart and amazon to tap fake products at origin,” said the RedSeer CEO.

This could severely crimp near-term enthusiasm for online shopping among new-age, smartphone-savvy consumers and dampen the rise of online retail in India, which is widely seen as the world’s last remaining major e-commerce market. Several top investors including Japan’s SoftBank Group Corp., South Africa’s Naspers Ltd and China’s Tencent Holdings Ltd have bet billions of dollars on the success of online retail in India, while a number of brokerages and analysts have predicted that India’s e-commerce market will touch $100 billion over the next decade.

“If you think they are fake, return it. Customers have to be watchful about the kind of seller they are buying from. They must be able to see if the product meets a certain degree of standards and if they think it cannot, then they must return it,” added Kumar.

These glitches are likely to become even more cumbersome to manage in the near future, with the likes of Flipkart and Amazon India aggressively adding thousands of sellers on their platforms every year. This, in turn, makes it harder for online retailers to ensure that third-party sellers and merchants sell original, first-hand products to customers.

Comparing India’s e-commerce market with those of the West, Kumar said, “As the e-commerce market matures, the quality of reviews will ensure that things are automatically taken care of. If you go to the European or the US Market, the credibility of the ratings will also increase. The negative experiences will come down and the positive experiences will go up. The second thing regarding the markets in US and China were significant issues in Chinese market, a higher percentage of fake products are being sold in China vs in US, Europe.

Consumers generally boast of the weapon of consumer courts to fight injustice meted out to them by sellers, however, Kumar is of a different opinion. “As far as consumer courts are concerned, they exist offline. If you see the pain which the consumer has to go through when they file a law suit is that there is a lot of problem in the entire process as well,” said Kumar.
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