54% of online shoppers denied warranty at least once: Survey

Next time while purchasing a product online, make sure you enquire about its warranty and service eligibility.

According to a survey by MySmartPrice, a price comparison platform, among the people who claimed warranty on products bought online, a whopping 54 per cent of them said that were denied warranty at least once.

As per the study, 55 per cent of the respondents said warranty claim process took more than a month to complete whereas 45 per cent of the respondents stated that the process of claiming warranty for a product online is usually completed within a week or two.

MySmartPrice said that denying warranty and delay is due to the "conflict between service centres and respective brands, or because of lack of service centres in the complainant's location."

Commenting on the survey findings, MySmartPrice Co-Founder Sitakanta Ray said: "While it is heartening to see several brands take an online only approach, it is also disappointing to see some brands turning away customers who bought their product online for service."

He further said: "To the few who do find the product defective, it is also important that both stores and brands work together to solve their issues."

The study draws insights from over 20,000 consumers who shopped through the MySmartPrice platform. It gauged shoppers concerns related to denial of warranty; need to claim warranty, and duration taken to claim the warranty.

Some of the reasons for denying warranty included lack of a bill from retailer or a stamp of the retailer on the warranty book.

Kerala retail traders’ associations want e-tailing to come under purview of VAT

Following pressure from retail traders’ associations, Kerala Finance Minister KM Mani has agreed to look into taxation issues thrown up by the growing online retailing, which the associations say is robbing the government of hundreds of crores of rupees in government revenue.

At the pre-budget consultations held at K.M. Mani Centre for Budget Studies at Cochin University, the minister said the government was studying the issue and steps would soon be taken.

The Kerala Vyapari Vyavasayi Ekopana Samiti, worried by the fast growth of e-tailing, had urged the government to bring online retailing under the VAT (value added tax) regime. It has threatened that if the government did not charge VAT from online companies, retail shops and businesses would not pay the taxes from January. The retailers complain that since the e-tailers sell their wares at a much reduced price, the business volumes of the brick-and-mortar shops had shrunk. As retailers had to pay 14.5 per cent VAT, municipal and other taxes as well as the huge expenses of direct selling which required paying rent and wages, their prices were higher. However, Jose Sebastian of the Gulati Institute of Finance and Taxation, told BusinessLine that it was impossible to impose VAT on e-tailing.

‘Principle of origin’

Since the country followed the ‘principle of origin’ for taxing commodities, only the State where the product originated could tax and not the State where the commodity was sent. However, once the Goods and Services Tax regime comes into effect in 2016, this would be possible as GST follows the ‘principle of destination’.

KVVES claims that in this financial year ₹10,000 crore worth of e-tainling would take place in Kerala. This would mean taking that much business away from the brick-and-mortar shops and a loss of close to ₹1,500 crores in taxes for the government.

Third Party Logistics market in India to reach Rs 48,000 crore by 2019

The Third Party Logistics (3PL) market in the country is expected to touch Rs 48,000 crore by 2019, mostly fuelled by outsourcing especially in retail, pharmaceutical, according to a survey.
"The Indian 3PL market is geared for a robust growth during 2014-2019. It is anticipated to grow at a CAGR of 21% to touch Rs 48,000 crore over the period 2014-2019. The 3PL market growth is fuelled by factors like the inclined outsourcing by Indian companies and many MNCs particularly in retail, pharmaceutical, automobile and FMCG sectors," according to a report by research and consultancy firm RNCOS.
The government's investment towards development of freight corridors, ports and highways, increasing demand by pharmaceutical industry and significant growth of e-commerce industry will be other growth drivers for the sector, it added.
The third-party logistics has been proved to be successful in enhancing logistics efficiency of many organisations and rapidly gained popularity while spreading across the country, the report pointed out. "The 3PL players are emphasising more on the technological upgradation to engage with the customers and also points out a trend of Fourth-party logistics (4PL) that is emerging to support the 3PL business in the country.
The concept of 4PL is expected to catch momentum over the coming years and it is expected to address the strategic failures of 3PL services and proposes the opportunity to achieve incremental benefits," RNCOS Founder Sushmul Maheshwari said.
Majority of overall market of third-party logistics is organised and it has been observed that it is utilised mainly in industrial and automobile sectors followed by pharmaceutical, consumer products and retail. As most of the revenue in the industry is contributed by big players, share of organised segment is expected to rise in future due to tie-ups and mergers and acquisitions which are anticipated to be more within domestic and international third-party logistics companies, it said.
However, there are challenges like low flexibility of third-party logistics systems to model different clients supply chain needs, congestion in ports due to less storage capacity, poor transport vehicles, jammed roadways and ports causing delay in movement of goods and lack of quality manpower that needs to be addressed, it said.

Andrew Yule to launch tea portal for B2C e-retail

Diversified PSU Andrew Yule and Company Limited will launch a tea portal tomorrow for e-retailing of tea targeting the B2C segment, its CMD Kallol Datta said.

"We are launching the tea portal tomorrow for launching e-retailing of our produce for the B2C segment," Datta told PTI.

He said it was big initiative of the company as the tea division was emerging as the highest revenue grosser.

"At present, we are not in the retail segment in a big way. But we want to make a splash in that area," he said.

With 15 gardens spread across North Bengal, Darjeeling and Assam, the company was producing 12 million kgs annually.

The company was selling packet tea in select retail stores at the moment.

In another initiative, the company had got one acre of plot inside Eco-Park in New Town area for developing a model tea estate near the city.

"We will try to make some production at the plot, which will be only for display purposes," Datta added.

Heady year for e-commerce

The year 2014 was perhaps the most eventful year – and a heady one -- for the decade old Indian e-commerce industry. The sector saw some milestone achievements, including the ₹2800-crore acquisition of fashion portal Myntra by Flipkart, a whopping $1 billion raised by Flipkart and a similar billion dollar investment by global giant Amazon.com.

There was plenty of media buzz with global investors and entrepreneurs such as Mayoshi Son, Jack Ma, Jeff Bezos and Ratan Tata investing and betting big on the Indian online market.

From radio to television, the online market dominated each and every marketing medium this year surpassing even the FMCG sector, till now the biggest ad spender.

Flip side

But it had its pitfalls too. Flipkart fumbled on its big billion sale day with technical glitches marring the show and was at the receiving end of a social media backlash.

Another leading portal, Snapdeal, faced the wrath of online consumers for delivering a brick to a customer instead of a smartphone.

Apart from such logistical issues, the major problems for the industry were unclear regulations and laws.

Growing awareness

Market experts, industry players and investors feel that the growth in the sector was fantastic with awareness of online shopping growing exponentially. They expect the government to get pro-active and understand the needs of the technology-driven consumer sector and come up with rules and regulations for the sector in 2015.

Swati Bhargava, founder of Cashkaro.com,said that the coming year would see an easing of Foreign Direct Investment rules, clearer guidelines on taxation, stringent cyber laws and the Consumer Protection Act being extended to cover online transactions.

“These things will bring in more credibility and help build trust among consumers that will finally boost the growth of the sector,” she added.

Sales tax laws

There are several issues related to sales tax laws that have cropped up in Uttar Pradesh, Kerala, Karnataka, West Bengal and a few north-eastern States causing uncertainty in the e-commerce ecosystem.

According to Harish HV, partner at Grant Thornton, “These things take time and are usually prompted by some incident or the other and as a reaction to it (Amazon, for instance, in Karnataka) the lawmakers try to formulate laws for that. There are several grey areas in relation to e-commerce, particularly with respect to VAT.”

Besides, the proposed Goods and Services Tax (GST) law is expected to be implemented in the coming year. “GST will create a single, unified Indian market to make the economy stronger,” says Sanjay Sethi, founder of ShopClues.com.

According to Gartner, the $3.5-billion e-tailing industry reported a 33 per cent growth rate and players feel that with transparent and well-defined laws coupled with large-scale global investments and entry of bigger players, the sector is set to double its growth in 2015.

Lack of clarity

The Internet and Mobile Association of India (IAMAI) has already formed a Digital Commerce Committee, with leading e-commerce companies of India as members.

It is talking about  amending the Consumer Protection Act, 1986. According to Anupam Mittal, founder of Shaadi.com, “There is way too much left to interpretation with different people in different agencies and government departments interpreting the law as they deem fit. The Modi government must affect a cultural change so that entrepreneurship is celebrated and not viewed negatively, which is a licence raj hangover.”

Rules & regulations

The lack of clarity or existence of these rules and regulations did not hamper the growth of the industry in 2014, but it will surely become a stumbling block over the next few years, feels Ashish Jhalani, founder of e-Tailing India, which is working on extending its platform to become the unified voice of the e-commerce sector.

According to e-Tailing India, the online industry saw unprecedented growth to reach almost $12 billion this year with online retail contributing close to $3.5 billion. This is expected to surpass the $100-billion mark by 2021 with growing usage of smartphones and mobile Internet penetration. Mobile e-commerce is going to be the next big thing, feel experts. For Flipkart, the surge in the number of people shopping on mobile across India has been dramatic with the majority of traffic coming from tier-II and -III cities.

“Most of our first time customers visited us only through the mobile medium. For instance, one out of every two visits to our platform has been through our app,” said a Flipkart spokesperson.

Key driver

Players feel that technology will continue to be one of the key driving forces in Indian e-commerce and significantly contribute towards improving the customer experience, strengthening supply-chain network and redefining the retail set-up for the domestic market. Increasing automation, personalisation and effective use of intelligence at scale is how the industry players see this space panning out in the coming year.

Funding

Players and investors are also bullish about funding next year that will significantly contribute towards the development of the online ecosystem thus putting India on the global map.

Investors will now look more closely to identify key USPs of e-commerce sites that will enable them to beat the existing leaders.

However, 2015 will see more investment flowing to vertical players such as Urbanladder, Bluestone and Zivame that specialise in one single category. Investors are expected to show interest in furniture/home furnishings, grocery, and baby care.

E-commerce enablers like logistics providers, payment enablers, are also expected to gain investors’ attention.

Consolidation

Though the sector witnessed the largest acquisition, so far, with the Myntra buy followed by a few small ticket deals in 2014, the coming year is not likely to witness much of consolidation.

The key, however, will be the ‘differentiator’ between the players. While niche and specialty players will attract acquisition by the bigger ones, players sharing common investors will increasingly look at mergers and acquisitions amongst themselves.