Resellers make hay during flash sales

Chennai: Resellers are becoming a growing menace for the e-commerce industry. They are fraudulently grabbing around 45 per cent of online sales of smartphones and hurting the e-commerce value chain.

While the reseller fraud affects all categories, it has predominantly hit the smartphone category in which discounts are heavy.. Small to medium tier offline retailers, who sneak through various checks and balances of e-commerce platforms, procure smartphones in bulk for reselling during flash sales and discount offers, finds a study by techARC.

The resellers then sell the product in the offline market at ‘market operating price’. In certain cases, where the brands have created an unrealistic ‘pull,’ the retailers do charge anywhere between Rs 500 and Rs 2,000 extra for making a handset available after it goes off the platform post-flash sales.

The study by techARC, based on interaction with retailers, distributors, logistics firms and others, found that 40 to 45 per cent sales of smartphones happening on e-commerce sites are such fraudulent transactions. Smartphones account for 47 per cent of the total e-commerce merchandise value (GMV). Reseller frauds lead to misappropriation of discounts and offers. E-commerce platforms, including Amazon and Flipkart, have been spending huge money to develop online channel sales of smartphones.