By Biswarup Gooptu, Jayadevan PK & Bharat Joshi
DELHI/BENGALURU: Consumer brands and channel partners are turning the heat on India’s online retailers, accusing them of not only undercutting prices but also encouraging the sale of counterfeit goods by sellers of dubious origins on their sites.
It’s round two in the increasingly attritional offline-online war, as India’s yet-nascent, but fast growing e-commerce companies bid to grab a larger slice of the country’s estimated $500-billion retail sector.
“We have invested over Rs 100 crore in brand and channel development but it seems to be nobody’s problem except ours,” said Sahil Sani, the owner of Mumbai-based Sahil International, a channel partner to global audio and infotainment giant Harman International Industries.
Sani recently discovered that a seller on Snapdeal 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 a Bengaluru-based offline retailer, Maneesh Singhvi, ordered JBL Pulse bluetooth wireless speakers from Snapdeal. On discovering that the product was neither sold or manufactured by JBL, Singhvi filed a complaint with the city’s Upparpet police station.
According to the first information report (FIR), which has been seen by ET, Snapdeal, the seller by the name Manisha Ashwin Kumar Farekh and the delivery company Delhivery have been named as accused.
“This is a clear case of cheating and investigations are going on,” said a senior officer investigating the case.
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 on the marketplace selling inferior quality goods, tagged under the Gizmobaba brand.
The response from New Delhi-based Snapdeal has been extremely lukewarm so far, said Chawla. Both Delhivery and Snapdeal did not respond to a questionnaire sent by ET.
“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.
Snapdeal, which claims to have over 25 million registered users, currently has over 50,000 sellers on its marketplace, the largest in India, and has targeted having a million sellers on board over the course of the next 12 months.
Gizmobaba, which sources all its products from Chinese manufacturers, but sells them under its own brand, is actively considering its legal options.
“We used to sell 70-80 products on Snapdeal, but have reduced that to 20-25 products right now,” he said.
The Mumbai-based venture has also been facing a similar issue with Amazon. “We talked to Amazon’s seller support, who have escalated the issue to their legal team. Therefore, we are a lot more hopeful,” Chawla 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,” said Vivek Prabhakar, co-founder of the Bengaluru-based kitsch brand.
There isn’t a lot brands can do against a marketplace or the delivery company with only the seller being found liable in such cases. Legal expert Baljit Singh Kalha said, “At a minimum online marketplaces should face the same criminal and civil liabilities, as that of offline retailers.”
Kalha, a partner at Titus & Co added that in India, marketplaces can conveniently push the blame on to the seller because India’s Consumer Protection Act hasn’t really taken cognisance of e-commerce.
“India’s Consumer Protection Act does not have the provisions to really protect the consumer in such a case, or hold the marketplace liable for the sale of counterfeit goods, since the e-commerce company can possibly say that they are just a ‘mandi,’ or a platform, and are not responsible for the actions of the sellers on the same,” said Kalha.
Source: Defence News