200 Fake eCommerce Companies Identified

Spying a fake company is difficult, even for India’s Ministry of Consumer Affairs, which just disclosed efforts around identifying about 200 fake eCommerce companies. The names of each company have not been released to the public, but the ministry has escalated the matter up to the Department of Industrial Promotion and Policy (DIPP) for further action.

“The department will coordinate with state governments and the ministry to get to the bottom of the issue,” said Commerce and Industry Minister Nirmala Sitharaman. She added that, for the next few days, all consumer complaints related to eCommerce companies will be answered via Twitter.

“Our department does not deal with consumer complaints. However, this issue is complicated, as many of the companies in question seem nonexistent … We will look into it together with the Consumer Affairs Ministry,” Sitharaman said. The Commerce Ministry said it will also be investigating offline retailers and their associations against eCommerce companies.

Sitharaman acknowledged that this issue is complicated simply because, as many of the companies in question seem nonexistent, they may be difficult to track.

Recently, retailers with brick-and-mortar stores have complained about the aggressive discount strategies adopted by online portals. This, in a sense, violates FDI guidelines, which say, “An eCommerce entity offering the marketplace will not ‘directly or indirectly’ influence the sale price of goods or services.’”

As previously reported by PYMNTS, India is slated for significant growth in eCommerce. For instance, StoreHippo is readying in advance of a mobile transactions boom, and payments technology firm Paytm is headed for a big payout related to eCommerce and mobile payments.