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IndiaMart Ranks Alongside Palika Bazaar As Most Notorious Marketplace

IndiaMart Ranks Alongside Palika Bazaar As Most Notorious Marketplace

The list features 42 online and 35 physical markets around the globe that, according to USTR, engage in trademark counterfeiting or copyright piracy

Right holders concerned with IndiaMART’s failure to adequately implement anti-counterfeiting best practices: Report

The report also featured four offline Indian markets for being hubs of counterfeit goods - Palika Bazaar and Tank Road in Delhi, Heera Panna in Mumbai and Kidderpore in Kolkata

Popular ecommerce platform, IndiaMART, appears to have landed in hot water after its name figured in this year’s notorious markets list.

The list is published every year by the United States Trade Representative (USTR).The 2021 Notorious Markets List featured 42 online and 35 physical markets around the globe that, according to USTR, engage in trademark counterfeiting or copyright piracy.

Inclusion on the list is a blow to the reputation of companies but carries no direct penalties.

The report lambasted IndiaMART, saying counterfeit pharmaceuticals, electronics and apparel could be found in ‘large volumes’ on the platform.

The report also panned the platform for its take-down system, which the report said was ‘burdensome to use and slow.’

The USTR report also pointed out that right holders were concerned with IndiaMART’s failure to adequately implement anti-counterfeiting best practices, including seller verification, penalties against known sellers of counterfeit goods, or proactive monitoring of infringing goods.

Founded in 1996 by Brijesh Agrawal and Dinesh Agarwal, IndiaMART is a B2B marketplace linking buyers and suppliers. The B2B behemoth witnessed over 259 Mn hits on its website and app in December quarter. Add to that, the platform had boasted of having over 143 Mn registered buyers on its ecommerce platform by the end of December quarter.

The report also called out four offline Indian markets for being hubs of counterfeit goods – Palika Bazaar and Tank Road in Delhi, Heera Panna in Mumbai and Kidderpore in Kolkata.

In addition to this, ecommerce companies operated by China’s Tencent and Alibaba Group also featured on the list. 

USTR is the trade arm of the US government responsible for developing and promoting American trade policy.

Counterfeiting is still a huge problem that plagues ecommerce players in the country. In July last year, Maharashtra Food and Drug Authority (FDA) had issued notices to Amazon and Flipkart after it emerged that pregnancy termination kits and pills were available for sale on these platforms without prescription.

Previously in 2018, the Drug Controller General of India (DCGI) had also issued notices to Amazon and other platforms for allegedly selling ‘spurious, adulterated and unapproved’ cosmetics.

The fallout comes amidst an acquisition spree by IndiaMART. Earlier in January, the company acquired accounting software startup Busy Infotech for INR 500Cr. In addition, the company also announced upping its stake in inventory workflow startup SimplyVyapar, along with a stake in legal workflow startup, Legistify. 

Prior to this in 2021, IndiaMART acquired a 26% stake in Gurugram-based Shipway Technology for INR 18.2 Cr. Then again in January this year, it  invested $2 Mn for a 26% stake in ecommerce enabler startup, EasyEcom.

As per a report by Research and Markets, the global B2B ecommerce market size is expected to reach $ 20.9 Tn by 2027, growing at a CAGR of 17.5% during 2020 -2027. 

The report also highlighted that the Asia Pacific region held the largest revenue share exceeding 65.0% in 2019 in terms of B2B ecommerce and is expected to expand at a CAGR of over 18% during the forecast period.

The report has highlighted the lax regulation in the B2B ecommerce segment. The shadow economy is so huge that policing it becomes a mammoth task. Ideally, these platforms should have taken proactive measures to prevent counterfeiting but they have failed badly to ensure order. With a rap on the knuckles, hopefully, the platform will now heed the lessons.