Flipkart’s Uncovers 250 Fraud Sellers

Top e-commerce player Flipkart has blacklisted 250 sellers on its platform after its ongoing ‘mystery shopping’ initiative found them to be selling substandard products.

Under the initiative, launched six months ago, more than 300 Flipkart employees and staff of a leading consultancy firm have been shopping from Flipkart.com. Called ‘secret agents’, they identify products or packages that are of substandard quality and send in pictures to an email ID that a Flipkart security team processes.

“We have received feedback of over 600 sellers. We took necessary action against 500 and blacklisted 40-50% of them,” said Sachin Kotangale, senior director at Flipkart.

He said most of the identified sellers were either selling poor quality products, or defaulting on deliveries, or making wrong packaging or price labelling. The e-commerce giant is taking action against these sellers based on the frauds committed by them.

Sellers who have failed the ‘quality check’ have to undergo training on the way delivery is done, goods are packed, and more, he said.
Flipkart has 85,000 sellers on the platform.

Multiple cases of counterfeits being sold online spurred top e-commerce players to employ measures to run quality check of the sellers on their platforms.

In the recent past, buyers from leading online shopping sites have complained about fake products being supplied by some sellers. These products include copied versions of branded headphones, shoes, cosmetics, bags, USB drives and watches.

“With e-commerce companies getting bigger the problem is only going to increase as it is impossible to verify lakhs of sellers,” said Arvind Singhal, chairman of consultant Technopak Advisors. “Even the biggest online retailer, Alibaba, is facing a torrent of counterfeit and sham goods,” he said.

Besides selling fakes, online sellers have also started resorting to malpractices such as buying out rivals, or buying their own inventory online, in case they get cash back from websites.

“We don’t offer cashbacks. But we have seen some sellers stock out rivals by just ordering and then returning their goods,” Manish Maheshwari, head of seller ecosystem in Flipkart, had told ET in October.

Flipkart’s data science team is also working on creating a system to identify fake product reviews and inflated star-ratings on the platform.

Its rivals such as Alibaba-backed Paytm and Amazon India have also employed measures to identify notorious sellers on their platform. Paytm had blacklisted about 3,000 fake sellers last year.