Before you click
on the 'buy' button on a great online deal, make sure the product is genuine,
because it turns out that fakes and grey market imports of reputed brands are
flourishing in India's booming online retail market.
Brands such as
Lacoste, Puma, Benetton, Canon and Nikon have initiated moves ranging from
taking legal actions and warning customers to negotiating with top retail
portals to deal with the menace.
Besides the loss
of potential sales for marketers, online listing of fake and refurbished
products impacts their brand equity as well as the overall credibility of
online retail industry. "While there is certain proportion of loss of
sales due to such fraudulent listing, it also jeopardises the brand name that
matters to us," Rajesh Jain, director & CEO at Lacoste India, says.
Lacoste doesn't
sell its wares online at all, but fakes of its polo T-shirt is available
anywhere between Rs 600 and Rs 1,200 online against the original ones priced
about Rs 3,000 a piece in the stores, according to theeconomictimes.
Sanjeev Mohanty,
MD, Benetton India, says, "Most of these online websites tend to be run by
fly-by-night operators without even proper offices. But we still take legal action
against those who try to erode our brand equity." The Italian fashion
brand sends at least one legal notice every month, while shoe and apparel maker
Woodland sends out 5-6 legal notices every month, according to its MD Harkirat
Singh.
While fashion
brands are worried about fakes, consumer electronics and gadgets makers are
concerned about parallel imports and refurbished products sold as new. Not
every online shopping site is involved in such activities even though some of
the bigger ones have been sent notices in recent past. Darshan Mehta, CEO of
Reliance Brands, which represents several international brands in the country,
says the company has received complaints from consumers who have bought, say, a
fake Diesel jeans or a Quiksilver shirt. "But we have never faced such a
scenario in the big online shopping sites," he says.
Big online
retailers are as much worried about such fake sales as the impacted brands are.
"Fakes are more relevant in the apparel category and do pose a danger
towards the image of online retail," Saurabh Malik, business head at
Indiatimes Shopping, says.
A recent report
by Google said that building consumer trust will be the key to sustained growth
of the e-commerce market, which is estimated at Rs 62,967 crore in India after
growing 128 per cent in 2012.
To ensure that
fakes are not sold through its platform, Indiatimes Shopping has forged direct
relationships with almost all known brands in the country and every product
that has risk of fakes comes with a certificate of authentication from the
brand, Malik says. Some other big online shopping sites such as Flipkart,
Myntra and Snapdeal, too, say they have started extensive screening of products
sold as well as sellers using their platform, to ensure they are not illegal.
Myntra chief
operating officer Ganesh Subramanian says the website has developed a
fool-proof system to ensure that only authentic products are sold and hence
does not sell categories like perfumes, which are more prone to fakes, and sell
products at full price.
But experts say it's not easy to make a
fool-proof system because several online websites have their back-end servers
located outside the country in places such as China where cyber laws and IPR
regulations are not strong. "Hence the onus, primarily, to put such
products or content is on person or entity who shall be liable for placing
counterfeits of copyrighted works," Advait Sethna, an advocate and counsel
specialising in IP Laws, says.
Some firms such
as smartphone brand BlackBerry and camera brand Canon have, meanwhile,
initiated talks with leading retail portals to bring them under authorised
online partner programme. "We have developed a digitally signed
authorisation certificate for the products sold through online sellers to
ensure the products are not refurbished or grey import," Alok Bharadwaj,
executive vice-president at Canon India, says. "This also became necessary
since the online sellers were not strictly following our trade terms, running
their own promotions or schemes, which were not as per our norms," he
adds.
Most marketers
say online pricing is a headache for them. Japanese camera brand Nikon has
issued an advisory for customers on its website that Flipkart and Snapdeal are
not its authorised partners or dealers in India. Nikon India VP Sajjan Kumar
says this was because these sites were selling at price points not fair for the
market. While a Snapdeal spokesperson said pricing depends on the sellers who
are licensed dealers, a Flipkart spokesperson said all Nikon products sold at
the site are genuine.
German sports
and lifestyle brand Puma, too, has voiced concern about pricing. Rajiv Mehta,
managing director (South Asia) at Puma, says the brand monitors online pricing
of its current season products. "If they blatantly discount it, we ask
them to remove it. Since we are the biggest brand for leading online retailers
in terms of sportswear, they listen to us," he says.
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