Online sellers who operate around Gujarat, Karnataka and Andhra Pradesh can rejoice. Logistics companyEcom Express is going to open two large fulfilment centresin the Mumbai Gujarat border and in the Karnataka Andhra Pradesh border this year.
TitledEcom Fulfilment Services(EFS), the company has opened a 5,00,000 sq. ft. warehouse in Bilaspur, named ‘INDIA-1’. The step marks the company’s entry into ecommerce fulfilment. Ecom Express has introducedthree new centresin Bangalore, Gurugaon and Lucknow, each spanning 40,000 sq ft. Not just that, the company intends to invest Rs. 40 crores to set up fulfilment centres over the next year.Sanjeev Saxena, the company’s co-founder and director said,
“We plan to launch 7 large and 20 small and medium warehouses in the near future with an ambitious target of connecting India seamlessly and substantially reducing the transit times.”
“The reason for opening fulfilment centres is that we want to give complete solutions to e-commerce customers. The objective is to reach any place in India by roadin two days.”
The company plans to reach 2,000 cities and towns in the next two years.
With EFS, thecompany will offerstoring and packing facilities, pick-up, order management software, quality check, returns and payment reconciliation.
Getting ready for GST
“WithGST, a lot of warehouse consolidation will happen and players will need big facilities. These facilities are available with us.”
Ecom Express seems to be having a good run, with the companyraising the most capital(compared to its peers) between 2015 and 2017 – a grand sum of $ 149.50 million. It seems to be planning its finances well, going by the recent moves.
A couple of days ago, the head honchos of online retail came together and agreed thatGSTwas alright for the industry butTCS (Tax Collected at Source) would bring about hindrances. The GST model requires etailers todeduct 2% TCS while paying suppliersand deposit it with the Government. At the same time, it does not apply to those who sell offline.
All three –Flipkart,AmazonandSnapdealbelieve TCS is a serious issue.
Snapdeal’s spokeswoman respondedsaying,“With TCS, capital will be locked away for periods between 20-50 days depending on the transaction date. The significant impact on the cash flow will force smaller firms to seek additional working capital or ignore the ecommerce marketplace altogether, as it may not offer envisaged convenience and benefits.”
An Amazon spokespersonsaid,“Working capital will be hit. Also compliance is an added burden for ecommerce companies. Majority of the products carry a return date of 30 days and given 15-20 million transactions per month and the returns, refunds to sellers have to be done with utmost care.”
But for online sellers, the meaning of TCS is quite contrary.
Sellers’ argument for TCS
TheAll India Online Vendors Association (AIOVA), a collection of 1,800 online sellers expressed that TCS under GST will not affect the average online seller. Only those evading taxes will feel the impact of TCS. The association mentioned that the issue of blocked capital on online marketplaces is already a challenge.
“The TCS clause will remove the problem of tax evasion among many sellers and the ‘unnatural’ competition emerging from it. Secondly, since the ecommerce companies are already holding seller money, TCS will not affect our liquidity,”AIOVA’s spokespersonsaid.
eSellerSuraksha, now known as e-Commerce Sellers Association of India, also had something toadd,“Merchants without proper registration will be forced to move out. This makes a level-playing ground for all online sellers in terms of product pricing. The merchants who evade tax may also quit.”
Seller’s argument against TCS
The main concern raised against TCS was that it would cause problems when product returns occur.
Campus Sutra co-founder, Dhiraj Agarwalstated,“Product returns in apparel ecommerce range between 15-20%. We will be required to claim the TCS from the department directly which is a cumbersome process.”
According to etailers, TCS will discourage sellers from doing business online and in turn hurt the online retail industry on account of held back working capital.
AIOVA made recommendations to the GST council asking them to maintain a threshold limit for TCS that will work for the online seller. Especially, if the present VAT liability is less compared to the TCS amount to be deducted.
For more developments related to GST in ecommerce stay tuned &click herefor steps on how to prepare for it.
Ecommerce market is expected to be at $50-55 billion by 2021 from the current $6-8 billion, according to a recent report.
The report by Retailers Association of India and Boston Consulting Group revealed that on decoding the digital opportunity sectors that could see maximum ecommerce penetration would be consumer electronics, apparel, homeware and furniture, luxury, health, FMCG and food and grocery.
By 2025, consumer electronics would see maximum penetration of ecommerce between 38-42% compared to 13-15% currently, while food and grocery could see the least growth with 1-3% of ecommerce penetration from under 1% currently, the report noted. In the last three years alone digital buying has increased from 3% in 2013, to 23% in 2016. The overall digital influence on consumers has increased from 9% to 30% during the same period.
The report notes that convenience has overtaken discounts as a key driver for buying online. From 40% in 2014, the report notes that more than 55% purchase online due to convenience. The digital purchasing has been catalysed by progress in infrastructure, including falling smartphone prices, reducing data charges, and rising smartphone penetration.
“Smartphone penetration has increased from 3% to 30% in the past five years. Besides, the prices fell by up to 50% between 2011 and 2015,” it said.
The report also noted that digital adoption by a user base over 35 years of age is much higher in the past two years alone. Ecommerce adoption has increased 3.8 times from 4% to 15% in the over-35 age group between 2014 and 2016, it said. Similarly, social media adoption has increased 2.9 times from 8% to 23% in the same time period. The report further noted that in order for companies to take advantage of the current digital wave, they will have to digitise their core business, to unlock significant value. Besides, consumer engagement, integrating all the channels of sale from website and mobile to in-store, and collaborating with marketplaces is key, the report noted.
We are often taught tricks and tips to identify scams, frauds and hoaxes. Be it banks or MNCs, they all actively work towards informing their clients, and general public that ‘do not fall prey to scammers’.Indian Online Sellertoo has published several articles ondealing with fraudulent buyers, how tohandle such situationsandprotecting yourselfas a seller.
This tells us that no reputed business houses would want to be associated with or encourage any fraudulent schemes and activities. However, many sellers inform IOS that Snapdeal is not only encouraging fraudulent buyers on its platform, but is also partaking in it.
Most of these scams happen between a seller handing over his/her product to Snapdeal and getting the product back in a miserable condition as ‘returned goods’. This is where a perfectly ‘healthy’ item is returned in a ‘dead’ condition.
Tired of the money-guzzling scams, say Snapdeal sellers
According to online sellers,Snapdealhas become a breeding ground for fraud buyers. That’s why many have left or are considering leaving the platform.
IOS spoke to online seller Mayank Goyal, who listed down some of the major issues related to fraudulent buyers and practices that vendors are facing on Snapdeal. Here it is:
RTO is charged by Snapdeal: If any buyer orders and if it undeliverable due to buyer rejects, pincode issue, fake address, incomplete address, they charge very high shipping fees
Tax percentage changed of the product: When the seller is liable to pay tax to the government then Snapdeal interferes in changing tax percentage. My product is in 5% category and they are charging in 14.5% category. Why seller should pay extra 9.5%?
Packaging material: Now new funda has been introduced by marketplaces like Snapdeal. They are forcing sellers to use their package material so that they can charge high prices as fake orders, incomplete address, and fake complaints issues are increasing. And sellers cannot reuse the packaging material again. Therefore seller has to invest more in these marketplaces packaging material
Old packaging material to new packaging material: When Snapdeal changed their logo from old to new, the packaging material also changed. Why they are not replacing old with new packaging material? Because they are charging high price for the same.
Warehouse fraudulent activities: Snapdeal and marketplaces are doing fraudulent activities when the products reach its warehouse. They charge high storage fees, packing fee and removal fees. They charge irrelevant penalties too whether seller is at fault or not. They manipulate with the accounts too and debit the amount in sellers’ accounts.
Let the fraud countdown begin
Online Seller Harish shares with IOS why and how it is no longer feasible to be associated with Snapdeal.
Fraud Number 1 – Against the return policy
Harish received an order on 9thOctober, 2014, which was dispatched on 14thOctober, 2014. After 3 days of transit, the order was successfully delivered to the customer by Snapdeal logistic partner. The customer didn’t raise any return request during the 7-day return policy.
“Snapdeal had neither accepted return from the buyer nor returned to the seller, but Snapdeal had debited the sum of Rs. 14,292.24 INR on 18th July 2016 i.e., after one year and nine months, saying that product is returned to seller which is completely false information. We did not receive any product on that date,” informs Harish.
“On 16th November, 2016, we requested for payment reversal and the dispute team from Snapdeal had allocated payment cycle. Later they haven’t credited the amount till date. Now when we are asking for the payment they are saying they cannot help because it is out of policy,” he adds.
Fraud Number 2 – The poor condition of returned goods
Harish puts bluntly,
“Snapdeal’s logistic partners are really poor in handling the LED Panel.”
Check the below images shared by him.
He adds further,
“As per the new policy, Snapdeal will not compensate seller more than 7000.00inr in this damaged condition. Even if the seller receives the product in 100 pieces, they will compensate only Rs. 7000 and they will ask for apology.”
Fraud Number 3 – Reimbursement Payment for damaged product
As per the Snapdeal’s policy, whenever sellers’ product gets damaged during transit, they promise to compensate the damage after validating all the evidences submitted by the seller.
Harish received a product in a damaged condition for which Snapdeal agreed to reimburse 95% of the amount in the November payment cycle. But even after repeated follow-ups, the etailer hasn’t paid him. From November to December and then to January, Snapdeal has only been pushing the dates, according to the seller.
“They have failed to credit in the promised payment cycle. Again and again we have requested 3 times to Snapdeal team to credit the amount and they are simply allocating payment cycles and they have not been crediting the amount. We have some case pending from 2014 and till now we have not got the payments. Whenever we ask they are allocating the new payment cycle every time,” says Harish.
Fraud Number 4 – Snapdeal manipulates the order cancelation policy to extort penalties
The seller received an order on 19th December, which he handed over to the courier partner on 20th December, 2017 (IOS reviewed the shipping invoice shared by the seller). But Snapdeal’s team marked that order as ‘Cancellation due OUT OF STOCK’ blaming the seller for not shipping the product. Later Snapdeal debited a sum of Rs. 7464.95 as stock out commission charges! The etailer can charge this penalty only when a seller fails to dispatch the order within 3 days, which was not the case here. Is this Snapdeal’s dirty trick to make some extra money at the seller’s expense?
Fraud Number 5- Feeding wrong information in the seller panel to refuse responsibility
A buyer cancelled an order when the product was in transit. So as the process works, the product has to be returned to the seller. But Snapdeal’s courier partner marked the product as ‘undelivered due to address not found.’ On the other hand, Snapdeal marked the product as ‘delivered’ in its return panel.
“..The logistic partner was searching for my location in Maharashtra. Snapdeal logistic partner says that this product was undelivered due address not found at destination city but my warehouse is located in Hyderabad. Snapdeal has gone beyond the logistic partner and marked on their portal as delivered but I did not get this product. When I am requesting to share the courier proof of delivery they are not helping out.”
Fraud Number 6 – Fake delivery attempts to liquidate sellers’ stock
When it comes to returning stock to the seller, if any product is undelivered then Snapdeal’s team sends a shipment alert. If the seller doesn’t respond then Snapdeal has the right to liquidate the product and seller can’t raise a claim to get his/her product or reimbursement. This is where it gets murky. Because according to sellers, Snapdeal makes fake delivery attempts and then keeps the stock and payment. IOS hadpublisheda separate story on this issue.
Harish too received an email from Snapdeal that states his product couldn’t be returned because ‘seller’s door was locked’.
“First of all, our warehouse is open 15 hours a days from morning 8 am to 11pm, 365 days. We work on Sundays, we work on festivals, we work on national holidays… If you guys (Snapdeal) made delivery attempt why none of our CCTV cameras shows anything,” Harish asks.
“People should learn from snapdeal how to fraud the sellers. By sending these types of fake mails Snapdeal has claimed lakhs worth of our good. Snapdeal is so powerful that by sending one junk mail it can liquidate our product without our permission.”
For each issue, Harish shared proofs and evidences with IOS. We’re sure he shared the same with Snapdeal. Then why the marketplace was unable to look into his complaints and reimburse? Why Snapdeal is consistently getting abad reputation? Bad as in,really bad.
We get it – the online world is full of scamsters be its buyers, sellers, suppliers or marketplaces. Snapdeal has been a victim of that too. Remember thefake mother-son duoor theB. Tech studentthat cheated the etailer? But how hard it is to take action against the fake buyers or fine-tune the return policies, based on the sellers’ complaints? Why Snapdeal is encouraging such scams? What’s going on Kunal Bahl?
Is it safe to assume that a lot of thought goes behind planning and implementing business strategies? But that’s not the case withFlipkart, if we consider the number of changes and reshuffles that has taken place within the company in the last few months.
In May 2016, Flipkart’s logistic arm Ekartlaunchedan online customer-to-customer (C2C) courier service. In January 2017, the firm announced that it isshuttingthe online service and would instead focus on building an offline courier service.
Now we hear is thatEkart has decided to shutits courier and hyperlocal delivery service completely.
Speaking on this new development, Flipkart’s representativesaid,
“Beginning February 5, it (Ekart) no longer operates its customer-to-customer courier service, started in May 2016, that gave people the option of having documents and parcels packed by Ekart’s delivery boys and shipped to end-addresses.”
What changed in just one month?
Until last month, Saikiran Krishnamurthy, Head ofEkartat Flipkart sounded upbeat about its courier business. Then what happened so quickly that the logistics firm decided to put down the lid on it?
The biggest change that happened was SaikiranKrishnamurthy left Ekart-Flipkart within days of announcing the re-launch of the courier service. Did the new CEO Kalyan Krishnamurthy decide to shut Ekart’s C2C service?
Ekart back to its core model
Word is out that Ekart would now wholly focus on its core business, which is ecommerce delivery for B2B clients. After failing to achieve what Ekartwanted, i.e. “to extend our core capabilities to our courier business”, the logistics company is back to its original service.
Ever since hisre-entryin Flipkart in June 2016, Kalyan Krishnamurthy has been cracking the whip and that too even before becoming the CEO of the company. Manytop executives have leftthe company (or were shown the exit door) since his appointment.
There’s no denying the fact that Krishnamurthy has a verytough jobat hand. It’s hard to tell whether the many exits and shut-downs indicate that the new CEO is slicing out the non-performing people and units of Flipkart or if he is unable to retain his employees and focus on other arms. Does Kalyan Krishnamurthy have complete control or has he lost control?
Ecommerce is changing everyday, and sometimes by the minute. So many new ideas and developments everyday, becomes hard to keep track.
We bring to you a curated digest of ecommerce developments/happenings around the world, compiled from various publications across the Internet.
Container shipping lines sign up with Alibaba to offer online booking
Two container shipping lines, France’s CMA CGM and Israel’s Zim, have signed up with Alibaba to allow customers to book space on their vessels through the Chinese e-commerce giant, in a bid to boost sales as the sector battles a severe downturn. Container lines, facing their worst ever downturn due to a glut of ships and weaker demand, are pursuing several measures such as vessel-sharing arrangements or mergers and acquisitions to ride out the current slump.
Would Private-Label Fashion Fly for Amazon UK?
Amazon is reported to be prepping its own fashion labels for the UK market. Details about its plans are sketchy, but if rumors of the effort are true, the ecommerce giant will find itself chasing an audience that’s generally receptive to buying apparel and accessories online.
Experts Weigh In On Walmart’s Purchase of E-Commerce Retailer Moosejaw
Walmart has acquired online outdoor retailer Moosejaw for approximately $51 million, adding the retailer to the Walmart U.S. eCommerce organization. Moosejaw is a online active outdoor retailer with a large web presence as well as 10 physical stores. Founded in 1992 in Michigan, Moosejaw carries more than 400 brands, including Patagonia, The North Face, Marmot, Arc’teryx and more.
Mattel and Alibaba Join Forces For China E-Commerce Push
Mattelhas inked a strategic partnership with e-commerce giant Alibaba to help the toy maker more aggressively sell core brands like Fisher-Price and Barbie to mobile-savvy Chinese parents. On Tuesday, the companies announced a pact that would combine Mattel’s(MAT, -1.27%)toy brands with Alibaba’s(BABA, -0.72%)data and insights into the Chinese consumer. The goal is for Mattel to tackle the $7 billion Chinese toy category, which has posted strong growth thoughaverage per-child spendingon toys is low compared to Japan and Western markets.
Canada’s Shopify reports bigger loss as expenses soar
Canadian e-commerce software maker Shopify Inc reported a bigger quarterly loss on Wednesday as operating expenses jumped 80 percent. The company’s net loss widened to US$8.9 million, or 10 cents per share, in the fourth quarter ended Dec. 31, from US$6.3 million, or 8 cents per share, a year earlier.
Online selling newbies always have to deal with an important question – marketplace or dedicated website? Creating and managing a website to sell your products online, while competing with giants likeAmazonandFlipkartcan be a daunting task, because of which novice sellers are advised to start slow, and stick with the online marketplace program. We think that selling on marketplaces is a great idea, but once you’re comfortable with the systems and procedures of going about it, it is good to think about adding a dedicated website into your arsenal.
Of course, the logistics of managing a sales website are not a joke, but if you shake off the initial inertia, you get to reap maximum benefits of the internet. There are many things that are involved in setting up a dedicated online store. Last week we talked about how to help you decide whether you should go for an independent website or not. Today we will talk about the basic aspects of how to manage and grow your website and make a mark in a forum that is otherwise crowded with sellers who tend to play it safe.
Managing and Growing Your Website
1. Integrate it with your inventory management system
The best part about managing your own website is that you don’t need to do anything different to manage its logistics. If you have a multi-channel inventory management systemthat manages your online marketplaces, you can add your dedicated website into the mix and let all the orders and inventory funnel through one portal. This makes your job much easier, since now all you have to worry about is handling the payments and couriers – things that were managed by your marketplace before. But the major job of order management can be handled by your trusty inventory management system.
2. Pay attention to SEO
The most effective way of inducing and sustaining traffic on your website is Search Engine Optimization or SEO. The content on your website is scanned to match with keywords that the user feeds into a search engine. The fresher and more optimized your content is to the expected keywords, the better the chances are of your website showing up in the top search results. It is a very tricky thing to sustain search engine popularity. You need to put a lot of thought in your web content and website design to make this possible. You can learn a fewsearch engine optimization tipsand make small changes to your website accordingly – they go a long way. Also consider having a rolling blog on your website, giving customers general information about your products and the market. It will keep the content fresh and increase the chances of your website showing up on top of the search results.
3.Manage payment gateways
As an independent website owner, one important responsibility that falls upon your shoulders is managing payment gateways. Most online marketplaces broker the payment gateways for you, like PaisaPay for eBay and PayZippy for Flipkart. Organizing and installing a payment gateway is not a very difficult job. You should spend a few minutescomparing tariffs of different trustworthy payment gatewaysin India.
4. Organize product catalogues
Organize your product catalogues carefully before you publish them online. The first step is to categorize your products into relevant groups that will be appealing to the consumer. Make sure that the terminology you use to name your categories is explained. Divide your categories into further sub-categories and place your products in a way that they are easy to access. Try tagging and cross-referencing your products through different categories, if need be. Click good pictures and add all relevant details for the products before uploading your online catalogue.
5. Master social media
Since you are up against established and popular marketplace giants in your dedicated website venture, our advice is to create and maintain a niche for yourself in the online world. Many mainstream social media marketing tips won’t work for you, and you will have to be slightly more creative in managing your social media accounts. Personalization is easier and works better with smaller ventures, and you must focus more on that. UseFacebook,Twitterand even email to create personalised, organic marketing campaigns. Don’t forget to reward loyal customers and have public interactions with them.
6. Track and analyse
The final piece of advice we can give you is to keep your eyes and ears open in the market. Study your competitors, even the goliaths. Look for patterns in their schemes and offers. Analyse your own web traffic carefully. If your website design is organic, you will be able to move products and offers around according to your need. Remember, every little detail matters. A simple matter of putting the checkout button in a hard-to-find place, or having a confusing color scheme/typography puts off many customers. Look how far the customers are going within your website. If you observe any bottlenecks due to faulty design, remove them ASAP.
These were a few tips and tricks on how to make the most of your independent website
Looks like the online marketplaces will not be getting Tax Collected at Source (TCS) underGoods and Services Tax (GST)removed. The GST council was to meet on Saturday,saida government officer familiar with the matter, to vet the law and it appears that TCS will be retained in the final draft of the law.
Why are etailer not in favour of TCS?
Bipin Sapra, a tax partner at audit and consulting firm EYsaid,“TCS will create a lot of issues; it is a disincentive for people to trade online. A lot of money will get stuck in the system which will hurt the industry. The same purpose can be served by getting all the details of the suppliers from the e-commerce companies without levying TCS.”
EtailersFlipkart,AmazonandSnapdealjoined handsto publicise how TCS is a hindranceto ecommerce and will result in cumbersome reporting. 2% tax must be deducted by online retail platforms from payments to suppliers and then deposited with the Government.
The ecommerce companies pointed out that TCS would block much needed working capital for up to 25-30 days and become an added burden for online sellers. They also stated that since TCS will not be charged offline, it will discourage sellers from selling online, as the cost of compliance will increase.
In response to this, online seller associations, AIOVA and e-Commerce Sellers Association of India came together and stated that there would beno real trouble with the implementation of TCS.
Will the TCS provision stick?
The government officermentioned,“The provision will stay. E-commerce companies have flagged their concerns saying how these provisions are difficult to implement. But they also concede that it is doable.”
GST is expected to kick in by 1st July 2017. The main purpose behind this tax is to remove tax barriers between states and encourage a unified market.
Based on the provisions of this law, online marketplaces must deposit TCS with the Government in about 10 days from the end of the month in which the tax has been collected. Electronic statements must also be furnished by etailers with details of the TCS from various suppliers with a proper break up of tax pertaining to CGST, SGST and IGST.
For suppliers to claim credit for tax payment made, their returns filed must match with the entries submitted by their marketplaces.
A separate chapter was put together in the draft GST law to deal with taxation in the ecommerce sector after states expressed their concerns over the loss of revenue from small suppliers not within the tax net.
Implementation of TCS does have a set of drawbacks, but some are okay with these while marketplaces continue to highlight these. Where do you stand in this matter? Are you for or against TCS? Let us know trough the comments section.