Smartphone Fraud Exposed: Flipkart, Amazon Resellers Are Cheating Brands And Consumers

In one of the biggest exposes unearthed, it has been revealed that massive fraud is taking place in the smartphone industry in India. This fraud actually changes everything we know of, regarding online sale of smartphones, and if not stopped, this can harm the entire industry.

It seems that we are living in a bubble of fraud, and unethical practice.

Online Smartphone Sales Data Is Wrong?

Since last few years, ever since the habit of ecommerce and online buying picked up, we have reported how smartphones are the #1 commodity which sells online.

Reports suggest that as much as 47% of all goods sold online are smartphones. This means that almost half of all online shopping is done only for smartphones.

Another report suggested that upto 38% of all smartphones sold in India are online-based. This means that one-third of all smartphones sold in the country are bought via ecommerce portals such as Amazon, Flipkart, Paytm Mall and others.

But now, we strongly believe that these numbers are fake, and Indians are not buying so many smartphones online, after all.

Reseller Fraud Exposed: Is This Cheating?

Gurgaon based market research firm techARC has revealed that resellers on popular online shopping portals such as Amazon and Flipkart are resorting to fraud.

This is what they do: Whenever a flash sale or special discounted sale happens, or a new smartphone is exclusively launched on online platforms, they buy those handsets in bulk, via various accounts.

Once bought, these smartphones are then sold via offline channels, at an increased price, and often at a premium price as well, since they are now ‘out of stock’ on online portals.

As per the report by techARC, “around 40-45% of online smartphone sales are fraudulent transactions initiated by resellers.”

This means that almost half of all online sales reported by brands are fake, as they have been in reality bought by resellers themselves.

The report has been prepared after taking inputs from retailers, distributors, logistics companies.

As per techARC, only 20-22% of all smartphone sales are actually online based, rest are sold via offline channels.

Why This Is Cheating The Consumers, And Brands

First of all, the smartphone brands which are offering deep discounts on online sales are cheated by resellers. These discounts should go to the consumer, but instead, they are grabbed by the resellers, who then encash the same via offline route.

Hence, both consumers and brands are cheated here.

Second, the smartphone brands are cheated again, lured by the rosy numbers presented by online portals like Flipkart and Amazon. Based on the numbers, the brands collaborate with them, and thus, genuine offline retailers are not given the chance to make it big.

This is again cheating.

We will keep you updated, as we receive more updates.

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