Something was amiss about the Lakme Eyeconic eyeliners Satinder Singh bought from Flipkart for his wife. Three orders over a few months, handled by three different sellers in three different cities, and each time something about the product's packaging bothered Singh. He sent the packs to Hindustan UnileverBSE 0.44 % Ltd, Lakme's parent company, for testing. Turns out that he was right. HUL confirmed the cosmetics were fake.
Thousands of sellers, drivers and restaurants routinely find new ways to exploit the various incentives these tech-driven companies offer to lure both customers and partners—buying their own products, raising the prices of dishes, booking their own cabs, or selling counterfeits.
Companies warn or debar offenders on detecting fraud, typically on receiving a complaint or if their algorithms flag suspicious behaviour from a particular device, phone number, email address or locality.
Flipkart immediately removed all three merchants from its online marketplace after Singh and HUL complained.
"We immediately bar such sellers and have established a mystery shopping team to identify fakes," said Manish Maheshwari, vice-president and head of the seller ecosystem at Flipkart. "For branded goods such as electronics, we now allow only authorised dealers to sell." To prevent pricing irregularities by vendors, Flipkart uses algorithms to detect if a product's price is too high or low based on the original rate entered in its database.
Customers are not satisfied that ecommerce companies are making enough efforts. "Counterfeit cosmetics are far more harmful than fake electronics or clothes," said Singh, a biotechnologist. "A fake kajal (eyeliner) containing metal impurities may damage vision temporarily or permanently, which no platform can refund." Singh refused to accept refunds offered by Flipkart and HUL.
Gaming the system to make an extra buck becomes easier as ecommerce firms pour their millions of funds raised into cashbacks, incentives and discounts. "We have seen a few cases where merchants bought their own products and applied a coupon for discounts," said Sanjay Sethi, chief executive of online marketplace Shopclues. "This way they made a profit and did not actually sell the product. This was caught out by the system based on the seller address and shipping address being in the same locali ..
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