Study Shows 1 in 3 E-commerce Customers Received Fake or Counterfeit Products

In addition it is estimated that about 4 to 5 percent of businesses in India lose to fraudsters each year in online shopping

In a study by tech insight provider Velocity MR to assess online shopping experiences and the volume of fake or counterfeit products in circulation, it appears a third of the online shopping public have fallen prey to counterfeits over the years. The study which covered a total sample size of 3000 respondents covered key Indian metropolises including Mumbai, Delhi, Bangalore, Kolkata, Hyderabad, Chennai, Ahmedabad and Pune.

Jasal Shah, managing director and CEO of Velocity MR said, “The online retail market in India is expected to touch $100 billion by 2020, and $200 billion by 2026. It is estimated to grow at a whopping rate of 30 percent annually, and hence India is dubbed as the fastest growing e-tail market in the world. The growing Internet penetration, global players, rise in smartphone usage coupled with innovation in mobile technologies, millennial consumers and digital payments is fuelling the growth of the e-commerce market in the country.”

He further adds, “E-commerce is increasingly attracting customers from Tier 2 and Tier 3 cities, where people have limited access to brands but have high aspirations. However, this is not free from its share of pitfalls. Even though the e-commerce companies and platforms state a zero tolerance towards any malpractices, however considering the very nature of the business, it would not be possible to maintain a problem free zone. We decided to conduct this study to understand how consumers are facing up to this challenge which is a clouding reality in the online world.”

It is estimated that about 4 to 5 percent of businesses in India lose to fraudsters each year in online shopping. There are a variety of fraudulent activities in the e-tailing business, one such being 'Fake Products' under the pretext of originals. This not only causes monetary loss but also jeopardises the goodwill of the original player. Velocity MR’s market research and analytics company’s conducted a dipstick to uncover the real perception of consumers towards fake and counterfeit products while shopping online and how they deal with it.

Highlights of the study show that 1 of 3 respondents received fakes/counterfeit products while shopping online at some point in time. In addition brands with higher sales volume have a higher likelihood of fake products passing through their system, while enjoying the highest shopping base, Amazon has nevertheless tried to maintain discipline and good hygiene according to the respondents. The most shopped categories such as Fashion, Mobiles and Computers with accessories, proved to be the vulnerable categories for counterfeit products. 

Interestingly however the majority of online shoppers were found to be technology savvy and use the QR code to identify Fakes/Counterfeit products; “Different product received” was logged in by shoppers typically on receiving counterfeits. The study further found trust in the portals remains intact for the shoppers. But they have become more alert, check more details and also compare prices before a purchase.

Insight into user preferences show that Amazon and Flipkart enjoy the highest universal high awareness across centres and age groups with Amazon leading the pack for higher repeat purchases. Myntra, PayTM, Snapdeal and Jabong although similar in awareness levels, have a lower shopping preference.

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