In a bid to reduce high online return rates, Flipkart has revealed it will be conducting regular ‘surprise checks’ on sellers.
In light of the high returns rate plaguing e-commerce marketplaces in India – with 30 percent of purchases being returned – Flipkart is calling for tougher measures to ensure products are better meeting customer expectations. These audits are reportedly in place to ensure all sellers are maintaining a reasonable level of quality with the products they’re shipping to Indian consumers.
Sellers who fail to meet Flipkart’s quality standards could stand to lose their Flipkart Assured badge, or be removed from the site altogether. Through this scheme, the Indian e-commerce giant is confident it can reduce online returns by as much as 10 to 15 percent over the next 12-months.
The alarmingly high return rate that’s rampant across the Indian e-commerce industry is believed to be causing a significant loss in revenue for both the marketplaces – Amazon, Flipkart, and the likes – and individual sellers.
According to RedSeer Consulting, the 30 percent return rate is comprised of both order cancellations and returned goods, with the figure being derived from the difference between how many orders are made, and how many are successfully fulfilled.
RedSeer says that fashion has the highest return and order cancellation rate of any other category, while mobile and appliances have the least.
“We feel the industry needs to focus on ensuring the right quality of product gets delivered,” a representative for RedSeer said. “30 percent is a large amount of revenue to be lost.”
The quality control audits are said to be part of the e-commerce marketplace’s latest initiative, Flipkart Utkarsh, which is designed to help sellers improve their business operations, and increase sales by meeting quality standards.
Flipkart told its sellers in an email that if 70 percent or more of their products fail its quality control standards, then the audit will be considered a failure and the products in question will be delisted from the platform for a period of one week.
A second audit is then expected to take place approximately 15 days after the first one, and if sellers fail to pass this audit, all of the seller’s products will be removed from the site.
This renewed focus on quality comes after US retailer, Walmart, purchased a majority stake in the business for US$16 billion on May 10. The deal between Walmart and Flipkart is expected to be finalised later this year, and see Walmart take up a 77 percent stake in the business.
After announcing the deal with Walmart, Flipkart’s co-founder, Binny Bansal, bid farewell to his friend and business partner, Sachin Bansal, who has now stepped out of his role with the company.
“Sachin’s enduring legacy will be that he was instrumental in bringing a smile on the faces of millions of people every time they saw a Flipkart Wishmaster at their doorstep,” Binny said in his farewell letter.
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