Consumer brands and channel partners have been repeatedly accusing India’s online retailers of undercutting prices. And now encouraging the sale of counterfeit products by sellers, under the name of authentic brands is causing another area of concern for companies.
Offline market demand of certain consumer products like electronics etc. is seeing a declining trend because of the new found interest and addiction in online shopping, which offers consumers attractive offers, deals and remarkable discounts. The fast growing e-commerce companies are bidding to grab a major part of the country’s estimated USD 500 billion retail sector.
Sale of counterfeit goods online is no old thing. The Economic Times came out with a report on how this malpractice is causing harm to the brands. As per the report, Sahil Sani, a channel partner to global audio company Harman International Industries, came across a seller on Snapdeal who was retailing counterfeit goods under the JBL brand, for which his company has the exclusive distribution rights in India.
The issue came to Sani’s attention when an offline retailer ordered JBL Pulse bluetooth wireless speakers from Snapdeal and discovered that the product was neither sold or manufactured by JBL. He filed an FIR with the city’s police station. The e-commerce company has made no efforts to take down the counterfeit products.
Other brands have made similar complaints against online portals. Alok Chawla, founder and chief executive of Gizmobaba, an online retailer of electronic gadgets, said that they have complained to Snapdeal about sellers selling inferior quality goods, under the name of the brand Gizmobaba.
“Snapdeal has refused to take off the the listings of the clearly inferior products. We have even sent them our trademark registration certificate, but they just do not seem to care,” said Chawla. “We used to sell 70-80 products on Snapdeal, but have reduced that to 20-25 products right now,” he further adds.
Bangalore-based Chumbak, which designs and sells goods online and through offline kiosks has faced similar issues on various e-commerce portals including Flipkart and eBay. The brand’s co-founder, Vivek Prabhakar said “We noticed the problem in September, when a couple of customers came to our kiosks in Delhi-NCR and told our sales staff that they had bought a product and the design is peeling off. We realised these were fake.”
And in all such cases, the marketplaces blame the sellers for doing so, and steer clear of any responsibility towards the brands they claim to have listed on their site
This is not the first time when such a heated situation is observed among the brands and the online retailers, as in the recent past, a similar news had come up when certain brands had decided to call off their sales through online market as they were devaluing their brand name. Gionee, Chinese mobile manufacturer, had decided to stop selling its products on unauthorized e-commerce portals, if in any case sale happens then the product warranty will be made void.
Another big player of the mobile market, Samsung had taken 48 of its models offline because of extremely low prices of handsets on online portals. This issue is in talk since long now, as extremely low prices of products on e-commerce portals is destroying trade sentiments and market for everyone.
The problem of unauthorized distribution of products is one that requires immediate regulation by both the Government and the online companies. Where marketplaces happily claim to have hundreds of sellers, thousands of brands and millions of products, nowhere do they claim to have verified all the sellers, nor do take measures to protect the brands listed on their respective portals. Such a practice could become a roadblock for the growth of online businesses in the country, since brands play a big role in driving traffic to the online stores. And if not curbed sooner, it could lead to immediate damage as well.