Flipkart Takes Action Against Supplier, Employee Over Fraud

Flipkart Takes Action Against Supplier, Employee Over Fraud

Flipkart Has Filed A Criminal Complaint Against One Of Its Biggest Suppliers Over Delivery Of Substandard Product

Indian ecommerce company, Flipkart has filed a criminal complaint against one its employee and one of its major suppliers, MRPL, over allegations of cheating, fraud, forgery, and breach of trust, ET tech reported.

According to the complaint, Flipkart had entered into a contract with Ahmedabad-based supplier MacroWagon Retail (MRPL) and its director to import and supply certain genuine products including Skechers shoes, which were to be sold by Flipkart India to sellers on its platform.

Flipkart, through a third-party forensic audit, found out that MRPL along with the Flipkart employee, designated to liaise with MRPL, indulged in the act of importing sub-standard products at a lower price while continuing to charge it at the rate agreed upon for genuine goods, the report said, citing a person with knowledge of the matter.

As per the report, the fraud also extended to other expenses incurred like excise, customs, and taxes, which were paid by Flipkart. Further, the Flipkart employee had also allegedly falsified bills, invoices and other accounting documents to conceal the fraud.

Flipkart, MRPL and Skechers were not available for comment while the employee against whom the complaint has been filed could not be reached out for comment.

This development traces its beginning to last year when reports of counterfeit products being sold on ecommerce platforms first surfaced when Skechers, with the help of court-appointed local commissioners, raided seven warehouses of the sellers in Delhi and Ahmedabad and discovered more than 15,000 pairs of fake Skechers shoes. Following this, the company filed cases against Flipkart and four of its sellers in the Delhi High Court.

Incidentally, the list of sellers against whom the complaint was filed included MacroWagon and thus it’ll be interesting to observe if this move has anything to do with the earlier allegations or will have any impact on the ongoing case.

The menace does not only include Flipkart; News18 which accompanied local police, which raided the Brahmpuri area of Meerut where a large number of fake products were recovered last year, reported that the products, which were mostly sports goods, were also being sold on Shopclues and Snapdeal. In July last year, Paytm Mall delisted over 85K online sellers and suppliers, in an effort to block fraudulent merchants from signing up on the ecommerce platform.

Over the past years, several petitions have been filed by consumers and companies against sellers/supplier selling fake products. Previously, companies like Tommy Hilfiger, Lacoste, Calvin Klein have also helped confiscate thousands of fake apparels through court-aided raids on warehouses, owned by either sellers or smaller niche fashion portals.

LocalCircles, a community social media platform, conducted a large survey this year on counterfeit product wherein 30,000 votes and over 12,000 unique consumers from across India participated. The result was that 38% consumers in the first poll said that they have received a counterfeit product from an ecommerce site in the last one year and 17% were unsure.

Indian ecommerce market is poised to hit $200 Bn by 2026, as per a report by Morgan Stanley and with more and more shoppers preferring the online medium, it will be imperative for ecommerce players to not let anything harm the trust of shoppers, especially with the competition heating up.

Author

Shivam Srivastav

Inc42 Staff
I have covered a wide range of markets and worked on some of the biggest political and business stories in the U.S, Europe, and India.
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