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E-commerce business might be a hot sector among investors, but the online market place might be emerging as a hub for counterfeiting and smuggling activities according to a new study released by corporate lobby group FICCI and consultancy firm Grant Thornton.
"Online marketplaces are increasingly coming to be a preferred hub for illicit trade, owing to their wider reach and ease of access. In the absence of any specific e-Commerce legislation in India, there is need for a separate e-Commerce law in the country to make online shopping a safe experience for the customers", according to the report titled Emerging Challenges to Legitimate Business in the Borderless World. Vidya Rajarao, Partner at Grant Thornton India says e-Commerce is the newest channel adopted by counterfeiters to effectively reach a wider audience. With online marketplaces witnessing a phenomenal growth in India, the space has also become an easy prey to fake goods", he adds.
The report quotes a study by Authentication Solution Providers Association that suggests counterfeiting is highest in FMCG packaged goods, personal goods, mobile phones, alcoholic beverages, bottled water, pharmaceuticals, etc., which is resulted in direct and indirect loss to the government to the tune of 392 billion Rs in 2014 compared to INR 130 billion in 2012.
Grant Thornton- FICCI say the standard of regulation in e-Commerce industry "undoubtedly needs to be raised" which includes the strengthening of e commerce dispute resolution in India
"The state of legislative framework in the space of e-Commerce is lax in India and need for a separate e-Commerce law has been felt by and large in order to protect consumer rights" the authors of the report explain. One of the recommendation the report makes to fix the current gaps in the industry is the speeding up of the Consumer Protection Bill, 2015' which is approved by the Union Cabinet, but is stuck with the Parliamentary panel. The second recommendation made is amending the current cyber law that protects consumers in a e commerce transaction.