If you thought in the Indian ecommerce industry, only online marketplaces have to deal with seller fraud, then you are wrong. Be it taxi aggregators or food-ordering service providers, every online company’s reputation is taking a hit due to infiltration of fraud vendors. And ecommerce companies are trying their best to control it.
It’s common news that few sellers on popular marketplaces such as Flipkart, Snapdeal and Amazon sell fake branded products. But the fraud doesn’t stop there as vendors find new ways to cheat.
“We have seen a few cases where merchants bought their own products and applied a coupon for discounts. This way they made a profit and did not actually sell the product. This was caught out by the system based on the seller address and shipping address being in the same locality”, said Sanjay Sethi, CEO of Shopclues.
Drivers of Ola and Uber are also taking their companies on a ride by false booking their cabs through their friends so that they can reach their minimum number of trips target and get incentives.
On condition of anonymity, a driver revealed this trick, “If the company finds out about one such recurring incident, some ask other driver friends to book trips for them and they do it vice-versa for them.”
Restaurants that have partnered with companies like Foodpanda are also indulging in such malpractices by hiking the food prices, fake-ordering & cancelling orders to get cashbacks and meet their order-taking targets.
While talking about how they deal with such frauds, Foodpanda’s CEO Saurabh Kochhar stated, “Our contract strictly mentions that the restaurants cannot offer higher prices on Foodpanda versus other platforms. If we find an issue/flaw, we have a structured compliance process in place and it may also result in termination of services.”
Right from calculating a seller’s risk score, planting mystery shoppers, mystery shopping, physical verification to mystery audit, online players are doing their bit to eliminate such frauds.
“Merchants are assessed on several risk parameters and finally allowed to be on-boarded based on the risk score. Parameters include type of business, revenue, legal documentation, etc,” disclosed Saurabh Vashishtha, VP- Business at Paytm.
Vishal Chadha, Senior VP-Market Development also shared Snapdeal’s strategy to sieve sellers, “We follow a standard procedure for checks and balances on the various products sold on Snapdeal. These include a physical verification of the products and submission of documents like brand authorization.”
Such bogus sellers are still less if you consider the overall ecommerce industry. In the online retail market, 2% of the sellers are fraud and in the online cabs and food-ordering industry it is higher at 8%. For now the number is small, but looking at the pace at which ecommerce in India is growing, if proper checks and rules are not implemented, such cheating cases will rise too.
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