The biggest pain point for e-commerce firms anywhere in the world is high return rate of their products. It adds operational cost for sellers on these platforms. And Jeff Bezos-led Amazon is not an exception.
According to US e-tailer senior executive in India, Amazon has the highest return rate in the country compared to all other markets it operates in.
The major reason for returns is counterfeit products, Dharmesh Mehta vice president for consumer and brand protection at Amazon told. Though he did not talk about the exact percentage of return rate in India. Amazon, as per its site, has offices in 30 countries.
As per industry experts, COD and logistics challenges like not tracing exact addresses in smaller towns are prime reasons for higher product returns. Over the years as e-commerce have registered growth it has also witness rise in a number of unhappy buyers and return of products.
Post demonetization, sales came down to more than 60 per cent for online sellers including Flipkart, Snapdeal and Amazon due to the high return rate. Amazon had witnessed a rise of 20 percent in COD return rate.
Overall, around 30 percent of GMV is product returned and cancelled by buyers, according to a Redseer report.
Meanwhile, Amazon is planning to bring transparency tool, which it has introduced in the US that allows users and sellers to scan a manufacturer’s code through a mobile application to check for authenticity. It will be introduced in India, said Mehta without specifying any timeline.
Homegrown e-tailers Flipkart and Snapdeal are also claiming to have taken measure to reduce return rate. They too have reportedly return rate in the range of 10-20 percent.
Last week Snapdeal had filed a complaint that many entities are misusing Snapdeal brand name to run fraudulent schemes. It has also launched Brand Shield to fight counterfeits and infringement activities.
This month a survey by Local Circle outlined that around 19 per cent of the buyers said they received fake products in the last six months. They claimed to have received the highest number of counterfeits from e-commerce sites in fragrances and cosmetics category. 69 per cent consumers opined that they did not know how to identify a fake product and just trust the e-commerce platforms blindly, added the survey. — Entrackr