April 10, 2019 8:25:09 pm
Smartphones are estimated to contribute 47 per cent of the total sales value of ecommerce in India, however, reseller fraud is hurting the entire online ecommerce value chain of smartphones, according to a report by an analytics firm techARC.
Reseller fraud can be defined as a fraud played upon by small to medium tier offline retailers who sneak through various checks and balances of ecommerce platforms and procure smartphones in bulk for reselling purposes.
As per techARC’s techINSIGHT report, around 40-45 per cent of online sales are reseller frauds that are adversely impacting the entire online ecommerce ecosystem.
“Reseller fraud is a modern-day malpractice adopted by few making the entire digital commerce of Smartphones appear shoddy and shabby. The entire ecosystem needs to work in tandem to fight it out.” Faisal Kawoosa, Founder & Chief Analyst, techARC said in a press statement.
The reseller fraud has several implications on the industry, including on online sales contribution, misappropriation of discounts and offers on e-commerce platforms, strategic importance of online channel and offline prospects, the report said suggesting that both the online as well as offline channel players shall have to come together to address this issue with support from the brands.
While brands could come heavily on resellers who are caught in unethical trade practices, the digital ecommerce platforms need to reinforce their business processes to arrest reseller fraud, the report said.
The offline trade bodies need to use their influence on such resellers not to resort to such practice which hurts the entire industry. The government also needs to look in detail into the issue as it could potentially lead to tax avoidance as well as creation of unaccounted wealth, it said.
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