Counterfeit products disrupting luxury ecommerce space

While most of the retail brands are working towards getting in the online space through top marketplaces, luxury brand owners are not too keen. Why? Because of the rising number of counterfeit products, that not only burns a buyer’s pocket but also damages the premium brand’s business & reputation.

A long way to go for online luxury shopping industry

In this Business Standard feature, Arvind Singhal, Chairman and Managing Director ofTechnopak speaks about the menace of cheap replicas of premium products, which has affected the online luxury market in India and around the world.

He said, “By and large, luxury brands discourage selling online unless it is their own website. In India, e-commerce portals follow the marketplace model, which makes it difficult for them to monitor the products. They do not have control over the inventory. So, most of the luxury brands you see online are purchased by vendors in the grey market and sold online.”

Marketplaces are to be blamed?

Besides a designer’s or brand’s own website, official distributors and few shopping sites that sources directly from designers/brands like Pernia’s Pop Up Shop and RocknShop, the chances of real products being available online are very slim. Especially in popular marketplaces.

Big ecommerce players like Flipkart, Snapdeal, and Amazon do discourage sellers from listing fake products, take corrective measures and put up a disclaimer that ‘we sell only genuine products’. But cases like fake speakers, fake Rayban, Nalli Silks replicas and Nikon controversymakes everyone question the legitimacy of such disclaimers.

Accountability is a matter of concern too, which is why most cases don’t reach a conclusion when pursued legally. Like Singhal pointed out, “The disadvantage is that in the marketplace model, which is what e-commerce portals follow in India, there is confusion about who is accountable, for customer complaints – whether it is the website or the brand.”

The circle of demand and supply

Sellers indulge in malpractice by manufacturing replicas, agreed. But there’s demand from customers which is fuelling the luxury counterfeit industry. When a customer buys a dress or a bag that originally costs a few lakhs on an 80% discount, he/she knows it’s fake.

“Actually, a lot of people who are buying online probably know it is not authentic. Anyone who wants to buy luxury usually wants to go to a store and enjoy the experience”, Singhal said.

The problem is due to these fake product cases, the ecommerce industry is earning a bad reputation. For this, online marketplaces’ owners should seriously think of effective ways to screen sellers instead of adding thousands of merchants blindly and risk being sued later.