Amid measures taken by the Modi government to crack down on poor-quality or fake goods sold via e-commerce marketplaces in India, the number of consumer complaints pertaining to the sale of such products has declined in the current financial year. From 4,610 complaints related to fake products registered with the National Consumer Helpline (NCH) during FY2019-20, which had increased by 61 per cent from 2,855 complaints during FY19, the number contracted by 31 per cent in FY21 to 3,140 complaints, according to the data from NCH. The e-commerce sector in India, which stood at around $50 billion in size and is likely to grow to $188 billion by 2025 as per Statista, is dominated by Amazon, Flipkart, and Snapdeal primarily.
“E-commerce companies themselves have been trying to reduce consumer complaints as they have an element of economic loss around it. They have to take the product back, there is a cost of shipping involved, they may or may not be able to recover from the supplier, etc. So, in many ways, the companies have been looking to build stronger quality assurance processes be it around fake goods, poor quality, return management, etc., even as regulatory clause certainly makes a difference,” Ankur Pahwa, E-commerce and Consumer Internet Leader, EY India told Financial Express Online.
The data on complaints around fake e-commerce goods received by NCH was shared by MoS Commerce Som Parkash in a written reply to a question in the Rajya Sabha recently. The Ministry of Consumer Affairs, Food, and Public Distribution had on July 23, 2020, notified the Consumer Protection (E-commerce) Rules to protect customers from being cheated on the e-commerce platforms. The government had asked the e-commerce firms to ensure that their grievance officers acknowledge any consumer complaint within 48 hours and redresses it within one month.
The Ministry had also mandated marketplaces to ensure sellers display descriptions, images, and other content pertaining to goods is accurate and corresponds directly with the appearance, nature, quality, purpose and other general features of the product. Also, details about the sellers including the name of their business and address, customer care number, any rating or other aggregated feedback about such seller, etc and any other information necessary for enabling consumers to make informed decisions at the prepurchase stage were mandated.
In January 2021, Snapdeal and four Indian shopping complexes were listed in the 2020 Review of Notorious Markets for Counterfeiting and Piracy issued by the Office of the US Trade Representative (USTR). In the 2019 report, Amazon India had also found a mention while in 2020 report, Amazon’s businesses in the UK, Germany, France, and Italy were named. Snapdeal was mentioned in the list in 2019 as well.
In response to the USTR report, Snapdeal, however, had stated that the report reflected a poor understanding of the governing law in various jurisdictions, including India. “While Courts in India continue to uphold and assert the distinction between marketplaces and sellers, the USTR report willfully blurs this distinction to further a flawed point of view. In doing so, it ignores clear and well-established regulatory and legal frameworks under which marketplaces operate,” a Snapdeal spokesperson had said. Apart from Snapdeal, markets including Heera Panna in Mumbai, Kidderpore in Kolkata and Palika Bazaar and Tank Road in New Delhi were added in the latest USTR list.