Why e-commerce portals don’t show MRP; it may make discounts look small, says expert

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Updated: August 21, 2019 6:08:52 PM

The government had asked e-commerce companies to disclose MRP of all products and expiry date of all consumable products as per the Legal Metrology (Packaged Commodities) (Amendment) Rules, 2017 in January 2018.

Ecommerce companies, ecommerce growth, FMCG, ewallets, recruitment in ecommerce, jobs in ecommerce, job postings, delivery person, guest service agent, sales mangerThe price shown for the product is often higher than the actual price in order to put a bigger percentage of discount to attract customers.

Indian e-commerce companies have been failing to fully comply with the Ministry of Consumer Affairs directive to display MRP on all products sold through their marketplace platforms. While large e-tailers such as Amazon and Flipkart have started to do so, small e-commerce firms and vertical marketplaces such as online pharmacies and online stores of large brands are largely missing on the rules implemented by the government in January 2018 as it might make their discounts look less attractive to customers.

“Disclosing MRP will not help them even as it is not difficult for them to do so. The price shown for the product is often higher than the actual price in order to put a bigger percentage of discount to attract customers. The discount percentage may not look that good if they put that on the real price,” Satish Meena, Senior Analyst, Forrester Research told Financial Express Online.

According to a survey among 9,000 online shoppers based on their last three months of online shopping, 44 per cent consumers weren’t able to find MRP details on packaged products on e-commerce portals. However, the percentage of customers finding MRP has increased from 40 per cent in February 2018 to 56 per cent currently, said the survey conducted by social community platform LocalCircles.

The government had implemented guidelines as per the Legal Metrology (Packaged Commodities) (Amendment) Rules, 2017 in January 2018 to ensure more transparency in selling goods online and boost consumer confidence in the online channel. The government had also asked e-commerce companies to disclose the expiry date of all consumable products. However, the companies are not in full compliance here too.

“While large online retailers have started becoming compliant but small e-commerce firms are yet to,” LocalCircles chairman Sachin Taparia told Financial Express Online. “There are logistical issues as there are chances of mismatch in the expiry shown online and on the actual product sent to the customer. Also since regulations are not strict enough, they are just buying time. So they are avoiding it till the time they can,” said Meena.

However, the challenge in disclosing expiry date of a product online is that the same product could have different expiry dates and so how can sellers and e-commerce platforms ensure compliance particularly from the warehousing standpoint?

“The seller can upload the best before date as an image or as text and can have two SKUs listed for the same item if they are from two different batches and have two different best before dates. This information allows consumers to make an informed decision. Such tracking is also helpful in case of a product recall for any reason and the whole batch can be distinguished from other batches of the same product. With multiple listings at the SKU level, they will also have the option of running discounts based on best before dates. A product which has a best before date coming in one month can be sold at 50 per cent discount while the one whose best before date is six months away can be listed at MRP or lower discount,” said Taparia.

Moreover, according to management consulting RedSeer, at the warehouse, everything is tagged or barcoded that is automatically synced to the server even as products on the website are timestamped. “On the website, products having expiry on a certain date will be automatically updated,” Abhishek Chauhan, Associate Partner, RedSeer Consulting told Financial Express Online.

Based on the survey by LocalCircles, 54 per cent of customers were unable to find the expiry date on human consumption products bought in the last three months. “Consumers informed that even for listed MRP, it wasn’t easy to find. In some cases there are as many as three clicks required to find the actual MRP,” said Taparia. However, similar to MRP disclosure, expiry date disclosure has also improved from 69 per cent customers who weren’t able to find the date in February 2018 to 54 per cent currently.

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