As Chinese e-tailers grow popular, Indian sellers complain of compliance, quality issues

 As the adoption of ecommerce in India skyrockets, a number of Chinese websites have made their way into the Indian market offering a variety of products at extremely low prices.

While the popularity of these websites continues to grow, seller associations in India are raising red flags against them, alleging non-compliance, ambiguity in ownership and poor quality of the products sold.

The All India Online Vendors Association (AIOVA) has written to the consumer affairs ministry to look into the operations of these Chinese ecommerce websites, which stand to threaten local merchants and sellers.

AIOVA has written to the ministry twice so far – a month ago and last week.

Over the past year, Chinese websites such as Shein, Alibaba’s Ali Express, Club Factory, Romwe, Wish.com have gained much popularity thanks to their low pricing. Though they typically take a minimum of a week to deliver products, given the attractive pricing and large variety, users don’t seem to mind the wait.

According to media reports, it is estimated that these websites receive an average of 10,000-15,000 orders each day. Made popular through Facebook and Instagram ads, these websites are not India-focused but ship products across the globe. And while the prices of some products are even lower than Rs 50, shipping is generally free for products above Rs 1,200-1,900.

However, there is no information on who owns, funds and operates these websites and where exactly they originate from.

Rules flouted

Speaking to The News Minute, a spokesperson for AIOVA said that these websites are flouting several rules and there is no clarity in their authenticity.

“Firstly, these websites are carrying out multi-brand sale in India, which is apparent when you view these websites. Multi-brand is not allowed, especially in ecommerce websites,” the spokesperson said.

While several retailers have been batting for multi-brand retail, the government has only been considering it with some local-sourcing conditions but has not given the green signal for it in the country.

In most of these Chinese websites, such as Club Factory and Shein, it is observed that goods are most often sold by Chinese sellers.

Another concern raised is the fact that it is not clear who owns the website or where the business originates from.

“If you see the website or the domain, you cannot see who has registered it or who owns it,” AIOVA says.

Furthermore, claiming that the government has no knowledge about the existence of such websites, seller organisations say that it is unclear if these websites are paying the Goods and Service Tax (GST) on par with what local sellers are paying in India. It isn’t clear if they are paying import duty or any form of tax, they claim.

Consumers affected

From a consumer angle as well, these websites, AIOVA claims, sell low quality goods, which are often misrepresented on the site and are completely different when delivered.

“They are not issuing invoice to customers for goods sold. There are several complaints of low quality goods being delivered, wrong delivery, no refund or return option. Consumers don’t have any protection from this under Indian law,” the spokesperson said.

A Google search on reviews for these websites throws up several such complaints on consumer forums against websites such as Shein and Club Factory.

A user claimed that her delivery was delayed and when she wrote a review on the product page on Facebook, the page was itself was deleted. And even after her goods were delivered, the sizes were wrong and not all products were delivered.

The Indian Consumer Court Forum website has hundreds of complaints against Club Factory. While a few claim that incomplete orders were delivered, many claim that no delivery was made despite the payment being made and that there was no response from their customer care.

Club Factory doesn’t have a Cash on Delivery (COD) option, making it mandatory for users to pre-pay for their orders.

Moreover, unlike most Indian ecommerce websites such as Flipkart, Amazon, Myntra, Chinese websites such as Shein and Club Factory require users to bear the shipping cost and ship products back themselves in case of a return.

“When the government has no information on them, why are they allowing it? Based on our findings, we have written to the consumer affairs ministry asking them to take action as per consumer rights,” AIOVA says.

AIOVA is yet to receive a response from the ministry.