Ecommerce is booming but are false discounts giving it a bad reputation?

Albeit the growth projections are low, Indian ecommerce is still booming. A representative of the Fossil Group, (a franchisee of premier labels like Armani, Michael Kros, Kate Spade, etc.) claims that digital is now a way of life and not just a channel for sale.

The general manager of the group, Paul Ruban said, “The Indian e-commerce business is projecting a jump of upto $45 billion by 2021. Close to 240 million people are forecast to purchase products online by 2019. And this is only the start.”

He also mentions that –

• 56% of the population is under 30
• 80% of online traffic is mainly from mobile phones

It is clearly visible that online retail influences buying habits on a daily basis. And the demand for it is growing every day. But what keeps consumers coming back for more? Could it be discounts?

The truth about Marketplace discounts

According to reports, a new survey has revealed that etailers are quoting discounts on products with prices higher than their MRP.

This issue was brought to the notice of Local Circles an online network and a community created by the Department of Consumer Affairs, after which the Ministry sought inputs from local citizens for useful solutions.

The survey conducted by Local Circles had more than 10,000 respondents from around 200 districts.

The founder of Local Circles, Sachin Taparia said, “Many citizens have complained in multiple local circles that sellers at e-commerce sites tend to inflate the MRP of the product so that the discounts offered on them could look attractive to the buyers.”

He further added, “Many shoppers tend to look up products based on discounts and end up falling in the trap only to find that the MRP on the actual product received was lower than what was listed online.”

• 41% of the surveyed claimed to have experienced this discounting malpractice on online retail platforms.
• 25% respondents said they hadn’t experienced it.
• 34% of the consumers said they weren’t sure of this.

“Consumers also suggested many solutions to overcome this problem with the leading one being display of a legible image of the actual product packaging with MRP,” said Mr. Taparia.

Another suggestion was that ecommerce platforms must obtain a legal undertaking from their sellers stating they will be barred from the site in case they inflate prices above MRP.

And, in the event of a request for a refund on account of MRP issue, the full amount paid should be refunded instead of offering shopping credits.

Some consumer stated that when they tried to mention in reviews that there were discrepancies in the MRP some of the leading ecommerce companies rejected their reviews.