eCommerce

Rise of ePharmacy in India

The onslaught on the pandemic saw the rise of various industries including E-Pharmacy, which offers users the convenience to purchase medicines with just a push of a button.

E-Pharmacy is an online medical shop where one can purchase pharmacy products from the comfort of your home. Just upload a prescription on the app and place an order for the pharmacy products you need.

This sector according to Frost & Sullivan is creating a paradigm shift in the Indian medicine market. It’s likely to reach over $3.6 billion by 2022 & presently contributes close to 2–3%. By the end of the year, it will capture 10% of the total market. 

ePharmacy is changing the landscape:

With discounts on medicines and giving users the convenience to purchase medicines and get the delivery right at your doorstep. Noting the rise of ePharmacy, investments have been on an influx. Various acquisitions are taking place, including Karexpert, C-Square and Netmeds. 

Reliance struck a deal with Netmeds’ parent firm Vitalic for about $83.2 million for 60% stake in the pharma marketplace. This deal grants Reliance a 100% ownership of Vitalic’s subsidiaries which are valued at about $134 million. RIL has said by April 2024 it wants to expand its ownership to 80% in Vitalic.

Reliance previously invested ₹10 crores in health-tech app Karexpert and integrated the services with Jio Health Hub. C-Square sold 82% stake to RIL, the company is entering a new rising vertical and is likely to dominate it.

ePharmacy is seeing exponential growth with many people opting for online purchase of medicine and consultation, this is resulting to be beneficial for the ePharm companies.

Netmeds delivers medicines, personal and baby care items, along with booking doctors and diagnostics on its website and app. This company had been looking for a buyer, and the pandemic provided that, through the deal with Reliance.

“Netmeds enhances Reliance Retail’s ability to provide good quality and affordable healthcare products and services. It also broadens its digital  commerce proposition to include most daily essential needs of consumers.”

Isha Ambani,  the director of Reliance Retail Ventures

The news of the RIL and Netmeds deal comes a week after Amazon announced the launch of its e-pharmacy service in Bengaluru, which it plans to expand in the rest of the country soon.

Amazon struck a deal with Netmeds, 1mg, PharmEasy and Medlife, as an attempt to expand in the ePharmacy market. 

Factors contributing to the growth of online pharmacies in India

  • ePharmacy companies are compliant with the IT Act & the Drugs and Cosmetics Act – legalities enable the industry to grow constantly. 
  • A significant amount of external funding is occurring in this market, with fundraising visions crossing the 150 million mark. 
  • This industry has also experienced government compliance with the draft of the pharmaceutical policy in 2015. The Niti Aayog’s three-year roadmap on the development of e-pharmacies too eased the growth.
  • ePharmacy offers pocket-friendly checkup packages to the customers, discounts, free consultations, etc, initiatives like this have helped the industries growth.

The future of ePharmacy

  • Consumer awareness: aligning activities to educate the common consumers with the policies, legality, etc will help the industry grow stably.
  • Quality assurance: purchase assurance & safety policies should happen by dealers before selling and buying the medicines online.

With the demand for increased convenience and instant solutions, ePharmacy has the potential of becoming a hit. Rural areas too show tremendous growth, which will allow the online medicine market to expand throughout India. 

Firsts to watch out for this Festive Season

The festive season is right around the corner and it’s experiencing a 75% jump, against the nearly $4 billion gross sales last year. This jump will record a two year high, with the gross sales amount predicted to reach $7 billion. 

A report by Redseer found that last year online retail recorded was 3% with as much as 135 million online users purchasing online. But with the onslaught of the pandemic, social distancing, and financial crunches, consumers now prefer online shopping with its convenience and festive sales. To adapt to this surge of sales eCommerce companies have adopted new strategies to meet the demands. 

eCommerce Preparation: 

Flipkart has announced that it will be creating jobs for 70000 people which will include posts in its supply chain management.

The Walmart owned e-commerce giant has cited the upcoming festive season and the Big Billion Days sale for this mass recruitment drive. Additionally, Flipkart has partnered with Max Fashion, Max has a strong presence in the fashion vertical and with this tie-up, both the brands will experience higher reach and profitability. 

Amazon India, keeping up with its competitors has introduced 4 new languages, Kannada, Malayalam, Tamil and Telugu, in order to woo the consumers and offer a more personalised shopping experience. Furthermore, with plans to make 10 new warehouses operational, this expansion will create thousands of jobs this festive season. The consumers can expect steep discounts & cashback across all classifications, and with Amazon’s, Alexa and voice-enabled shopping experiences consumers can shop easy.

Entering the market, the new competitor JioMart will pose a challenge to the other two giants, by combining both online and offline retail. However, being new to the eCommerce industry Jio will likely pose a limited threat

This festive season, consumers interestingly have shown interest, not in conventional electronics items but essentials, including groceries and work-from-home products such as laptops, single-item furniture, kitchenware and comfortable fashion. And according to reports 50Cr. Studies suggest Indians will buy 50,000 Lakh items this festive season. 

Demographics:

Covid-19 has caused a surge in first-time users of tier II & III cities. Reports done by Redseer and Unicommerce suggests that shoppers from these regions will be the top contributors to online sales during this year’s festive sales with more than 50% of purchases coming from Tier-II and beyond locations. While people from metro cities and tier-1 cities will be contributing to 35% and 25% of the sales respectively. 

Logistics & Supply-chain: 

The logistics and supply chain will determine the success of the festive season and the performance of the companies, hence Industry executives are working with sellers and brands to overcome supply-chain and investment issues and meet the surge in demand. A higher number of shipments are likely to occur with its peak being 7.5-8 million shipments a day during the festive season. Hence, efforts are taken to create a seamless supply chain with a glocal outlook.

The firsts this year: 

  • Massive Growth: COVID-19 has enabled massive growth in new consumers, that prefer to shop in a manner that is convenient, safe, and hygienic and the eCommerce space meets these requirements
  • Offline recovery: Physical shopping is still weak as consumers are still apprehensive about visiting touchpoint areas like malls and retail outlets.
  • Demand: Surge of demand will likely occur in eCommerce platforms with its sales and offers for products in the category of work from home/ study from home, this has subsequently will increase the demand for categories like small electronics, home furnishings, and electronic accessories.
  • Jio: Jiomart has entered the retail market with its online and offline retail stores. This will play a moderately strong role in growing sales in smaller cities, especially if strong integration with fashion/electronics commodities.
  • Aatmanirbhar Bharat: A strong push towards Aatmanirbhar Bharat.

With digital adoption, the shift with traditional offline shoppers moving online, and a change in consumer behaviour. This festive season will offer opportunities for eCommerce companies to grow and learn about the current consumers and their dynamic market. 

THE IMPACT OF COVID-19 ON ECOMMERCE

COVID-19 shifted the whole ecosystem of markets and has made an impact that can be deemed long-lasting. Consumer behaviour has seen a change, purchase decisions have seen a shift and the usual flow of businesses is left disrupted. But along with the many disruptions, this pandemic has brought about changes and enhanced technological growth. The eCommerce and marketplace sector have specifically witnessed this growth.

The pandemic has accelerated India’s e-commerce market almost threefold and sped up growth that is pegged to be around $85 billion by 2024, even with other sectors being negatively impacted. 

India has seen a rise in the number of FTUs or first-time-eCommerce-users in India, who had previously been inhibited to shop online. Some eCommerce platforms like Amazon, Flipkart and Snapdeal have even returned to the level of pre-COVID time. Other eCommerce players like Grofers, BigBasket, Lenskart, etc have also seen a rapid increase in various services. Many new players are entering into this marketplace noting the opportunities available. eCommerce companies can further expect: 

  1. An influx of online shopping: 

As stated with a record number of FTUs in India and brick-and-mortar and kirana stores closed and with lower footfall than usual, there is an increase in sales on eCommerce platforms.  There has been a switch from malls and supermarkets to eCommerce for everyday commodities. Companies can use this to their advantage and provide good deals. Companies like BigBasket had seen such an influx and demand of goods that they had to restrict access to their website to existing customers only, while Grofers – a rival, had faced a similar situation.

A conversation with TN Hari, Head of HR from Big Basket in April 2020 helped gain insight into changing consumer behaviour and adaptations to the new normal. As rightly predicted, the shift from offline to online in all sectors has been perceived as the need for the hour.

  1. More efficient and convenient models:

Online shopping offers the convenience of not having to go out to shop and waste time waiting in lines and scrolling through items, all it takes is just a click on a button to purchase a product that will be delivered right at your doorstep. However, eCommerce platforms should ensure efficiency in logistics and supply chain flow. Myntra’s End of Reason Sale had integrated and collaborated 400 offline stores of more than 60 brands. The items that were purchased shipped directly from the brands’ stores to the consumer’s doorsteps. Allowing for a more seamless supply chain and providing convenience to the consumers. There is also a significant rise in the number of convenient shopping models like BNPL gaining prominence among the Indian consumers.

  1. Increase in essential and corona virus-related products:

Shopping habits and consumer behaviour has seen change during the pandemic. Ecommerce companies are being required to sell essential items as a way to have an edge and meet consumer demands. Products like soaps, sanitizers and health care items have a market of its own now. ePharmacy has seen an increase in India, with numerous investors looking on ways to invest in ePharm companies. Amazon has also noticed the shift in consumer behaviour and adapting to the pandemic is said to have prioritised delivery of essential items garnering appreciation and an increase in its sales from customers. 

  1. Digital transformation: 

Kirana stores have been the crux of Indian System. But, now with the virus outbreak, people are looking out for alternatives. This has offered digitalisation and upskilling of Kirana stores to adapt to changes. Companies like Flipkart in an attempt to streamline this unorganised sector have tied up with these stores for provisions and delivery while still supporting their development. 

This pandemic has gauged a segment of shoppers that previously have not purchased online to now rely on it. Consumer buying habits are constantly changing and companies need to follow efficient ways to get FTUs hooked on while still retaining existing customers. 

With the rising adoption of Omnichannel solutions across sectors and focus on digital transformation eCommerce companies have seen and will continue to see tremendous opportunity and growth amidst COVID.

Key Factors to Help Brands Decide the Right Discount for Products during a Sale Period

Starting a business and taking it forward requires a good amount of planning and implementation of novel ideas. Through various advertisements and other promotion techniques, the glory of your brand can be propagated by the word of mouth. Among the many strategies they take up, the most attractive one for the customers is the discount offers for their favorite products.

Nobody likes the idea of losing money even if it’s for the purchase of their favorite products. People always look out for discounts because it provides a feeling of not losing so much money even though it may be only partly true in reality. Since its crucial point in marketing and sales, the company should give proper care while deciding the discount rates for different products.

Providing discounts for materials is a great way of luring customers into your shops and gaining desired profits. But any action done without proper research and calculations can be of fatal impact to you and your brand’s financial structure. Any mistake could result in the deterioration of your name and product.

Therefore it advisable to look out for the necessary details before granting discounts to customers. First of all, align all actions to a fixed list of objectives. The right amount of background work on tentative discount rates and corresponding profit reports can help you taste success. Following are a few steps you should focus on:

The category and quality of your brand 

It is crucial to identify the category of your brand before placing it under any discount rate. For instance, if a particular product of yours falls under the category of fast-moving consumer goods (FMCG), it is not desirable to fix a high discount rate. It also directly depends on the quality of your product and brand name. If it is not premium, then the rate of discount should solely be focused on the available stock and target income. ‘Buy one get one free’ offers are the best ones to implement in such situations. 

The season of the market 

The requirements by customers vary a lot with corresponding to the seasons or festive occasions. The retailers have to keep these in mind while deciding on the discount price. This has to go in tally with the availability of products. In case you need to empty the old stock of products, then devise a plan including mass discount rates. The sales should be controlled according to the intake and response from buyers. 

The aging of your product 

Since the sales market is a very unpredictable place of action, the businessmen should be alert and vigilant. You have got the responsibility to sell off as many products as possible and also devise a plan for dealing with those which couldn’t get sold. While providing alluring discount rates, no compromise should be made on the quality of the product. This shouldn’t be leading to the dissatisfaction of customers. There should be a proper balance between the two.

In desperate cases where the product is aged a lot, some compromises need to be made while fixing its discount price. The resulting tension can be solved by clubbing them with other products and providing combo offers. If you are planning to get rid of your liquidation stock, the end of season sale (EOSS) is the best way to go about it. Flash sales during festive seasons can also help in increasing customer response.

Keeping up with the annual target 

Before starting on a business venture, the primary work should be done on the paper regarding the flow of income. A record of the total earning, income, and expenditure should be kept up to date. The profit and loss (P&L) statements should be monitored every month. Based on the balance sheet, the discount offers should be implemented to cancel off payment loss. If in any case the revenue target of the previous month is not met then it should be added and compensated in the next month’s sales. The discount rates in flash sales should be fixed accordingly.

Eying on the competition 

Before fixing the price of a particular product of your brand, you should be aware of other rival brands offering competition in the same area. The difference in prices of the two brands can make a huge difference collectively. By understanding and analyzing the trends in the market, you’ll get a clear picture of how to implement the plan. Even the slightest 1% increase in your discount price can result in a massive profit gain for your brand.

By keeping all these points in mind and acting accordingly, you could surely devise a plan and fix the discount rates for the products in a way that ensures final profit.

THE BUY-NOW-PAY-LATER MODEL IS HERE TO STAY, AT LEAST THESE ECOMMERCE GIANTS THINK SO

The pandemic has seen major shifts in the market and one among the many are payment methods. In the pre-COVID period, consumers opted to pay for over 60% eCommerce transactions in cash (Cash on Delivery), but after the pandemic, it is safe to quote that the vast majority is opting for digital transactions. This digitalisation has led to new developments in the eCommerce marketplace. With various companies trying to woo consumers, a number of options are being offered to enhance the buying experience of consumers and make it more convenient.

One such option that is taking this industry by storm is the Buy-now-pay-later payment method. This feature allows the consumer to purchase the service or product at that instant and as the name suggests pay for it later or in installments. Further delving into the topic, a few companies take an interest in the cost of the product while others take the principle as credit. The credit from Buy-now-pay-later service is essentially the same as a credit in a credit card, but with a digitalised disguise.

Various Indian companies have jumped on the BNPL wagon, with an attempt to have an edge over their competitors.

FLIPKART

Flipkart, an eCommerce heavyweight has also featured the buy-now-pay-later scheme. Although, the working of this service is still in the beta stage, and is only available to certain android users. The working of it allows customers to purchase products up to a predefined credit limit without having to pay immediately. However, the outstanding amount needs to be paid by the 10th of the next month.

“Everybody loves shopping, and everybody loves shopping on Flipkart. But, scrambling for cash for COD purchase or getting out your debit or credit cards for online payments and typing in OTPs every time you make a purchase can be a hassle. If only there was a simpler way to make all this easier. Well, now, there is.”

Flipkart

Features:

  • Instant credit up to ₹5,000
  • 30-second application process
  • One-click checkout
  • Zero cost up to 35 days
  • Single bill for all purchases

With the festive season fast approaching, the BNPL option may just be the feature that lets people let loose and shop to their heart’s content.

AMAZON

eCommerce giant, Amazon, has also launched a pay later feature to its Indian customers. Under these payment options, customers can avail credit with zero interest rates on any listed products. The customers are provided with an option to repay the amount in monthly installments up to 12 months. However, there are various requirements in order for a person to avail of Amazon’s pay later option including being 23 years old and above, providing valid identification along with their PAN card, bank account number, etc.

Key Benefits:

  • Get an instant decision on your credit limit by the lender.
  • Credit card details not required.
  • No processing or cancellation fee.
  • No pre-closure charges.
  • Seamless checkout on Amazon.in using Amazon Pay Later payment option.
  • Simplified tracking of expenses and repayments on the EMI specific dashboard

The Pay Later feature is also a mobile-only experience that enables a smooth buying experience on the app.

PAYU

LazyUPI, a product offered by PayU Finance, is also following the Buy-now-pay-later model but has integrated it with a UPI. This unique digital service works on the same lines and offers credit across online and offline platforms. It allows customers to make part-repayments and has a minimum amount due along with conventional interest rates. These services have provided opportunities for start-ups to model around the buy-now-pay-later option and have given a fresh sense of innovation to mobile wallet services and eCommerce platforms. Various eCommerce platforms including  Big Basket, Myntra, MakeMyTrip, etc, have integrated this service into their sites.

Key Benefits:

  • One tap payment
  • Settle payments every 15 days
  • Repay with EMI
  • Integrated across 250+ sites

The buy-now-pay-later concept in layman terms is similar to that of a credit card. However credit cards too are evolving into the BNPL model, as it fits better with millennial consumers that are looking for convenience and affordability. Credit cards offer high rates of interest and low transparency, but with few eCommerce platforms offering a zero-interest-rate and a long payback period, one can certainly understand the rave behind this service. 

While BNPL offers convenience consumers should look out and align themselves with certain habits to ensure maximum efficiency:

  • Note the limit and have only one BNPL account at a time
  • Budgeting needs to be made important to avail the BNPL option
  • Be committed to repaying the companies to avoid interests

The Buy-now-pay-later model is not a new concept and can be compared with the Indian Khata system, where customers were allowed to pay the entire bill at one-go which was typically towards the end of the month. This age-old concept was given a digital spin and the buy-now-pay-later model was created. With the disruptions and numerous opportunities that lie ahead, brands need to keep an eye out for this service and invest to integrate it with their current functioning.

CONTENT MARKETING FOR E-COMMERCE – How Content Can Change Your eCommerce Game

eCommerce is one of the biggest platforms for businesses to rise and shine above all. It helps the business to reach every potential customer and get them going with the required goods or services. But, that is not all as people’s living standards and tastes dynamically influence the demand. Thus, they expect the best of services offered to them by the various business concerns.

eCommerce giants have developed numerous strategies to counter this issue via advertisements, discounts, incentives, SAP Hybris, Intershop, and WCS. But this isn’t sufficient to lure customers and gain their trust over the internet.

Content marketing for eCommerce has gained immense significance to provide exciting content to the customers. Strategies such as tips and tricks, DIYs, and much more are more important than the price competition among different sellers.

Content marketing strategies such as video descriptions for products and other related videos or images can help convert sales into revenue. Referred to as A+ pages on Amazon, content marketing for eCommerce includes the use of HD images, videos, infographics, and FAQs to attract buyers. This brings customers to finalize their decision to buy goods and thus bringing in revenues.

On the other hand, a brand store page on Amazon is also beneficial to create multiple pages for your brand and discuss your visions, business ethnic, product values and use. In short, you can create a complete nutshell for your brand online.

Integrating content and eCommerce

  • SEO optimized content to drive traffic

The best way to drive customers to your website is by using Search Engine Optimized content to highlight your website amongst other competitors. This makes your site the top most searched website and brings more customers as they tend to fall for the topmost searched website. Content marketing for eCommerce has SEO tools as the topmost priority amongst all others. SEO optimized content for eCommerce and marketplaces can refer to well laid out product descriptions, bullet points with key attributes that people are actively looking for A+ pages that act both as SEO rich branded content and an extended content piece to enhance sales by adding value.

  • Using images to bring reality

One way to attract customers is by uploading the products’ images by the business concern. It will entice customers to get attached to the business and rely on the standards of the products sold. Also, you can post about the best products to buy in a particular season. Good images with well thought out cataloging and direction can enhance the buyer’s decision by highlighting key features and attributes that make the product unique.

  • Amazon Ad copies.

eCommerce can be a thriving option when you partner with other eCommerce giants such as Amazon by selling the products using their platforms. One of the ways to follow such a path is Amazon Ad copies wherein you can pay for the advertisement section when someone types a related keyword.

This is similar to using SEO optimized content for being the topmost website. There are two options for the advertisements – headline ads and sponsored ads. Amazon content strategies help eCommerce businesses gain advantages over others.

Final Word

eCommerce uplifts the company and helps gain a competitive advantage over the vast market. Also, the eCommerce websites following serious content marketing strategies differentiate them from mediocre pages. Certain websites lay focus on providing services to the customers, thereby neglecting on luring customers and enhancing their customer-business relations.

Content marketing is the major difference between a product page and a mediocre page and has immense significance while extending vision towards the growth and development of eCommerce. Also, the product pages use rich content such as images, videos, and quotes to stabilize the customer’s interest and provide them with the best products and information.

WHATSAPP & ECOMMERCE – A duo to watch out for

There’s hardly anyone who hasn’t used WhatsApp. With a massive userbase of over 400 million active users, India is one of the biggest markets for the Facebook-owned business messaging app.  The eCommerce industry has been quick to evolve with technological advancements and WhatsApp has seen this as an opportunity to jump on to the eCommerce bandwagon. 

Companies have started actively incorporating WhatsApp into their eCommerce strategy. WhatsApp Business has become the go-to messaging channel for customer care.

Small businesses have started using the catalog feature to share information like product photos, addresses, map locations, etc. Whenever a customer enquires about a product, a catalog can be shared to help view products and get information for a particular item. 

A Nielsen report on FMCG consumption during COVID-19 has mentioned that consumers have started using WhatsApp to place orders due to the social distancing norms.

According to sources, WhatsApp Business will experience unprecedented growth of more than 5,400% among medium and large businesses looking to use its API. The findings are based on research involving all the major omnichannel messaging providers.

Mobilesquared believes 5.25 million small and micro businesses were using the free WhatsApp Business app at the end of 2019, and it expects this number to rise to almost 7 million by 2024.

  • Enhance customer service & support 
  • Take advantage of broadcasting & alerts 
  • Ease of delivery & communication
  • Distribute content 
  • Brand authenticity 

As the pricing of mobile data stays low, and smartphones become affordable, penetration of WhatsApp would boost in the coming time and make it the most convenient platform for consumers to interact directly with brands.

5 e-Commerce mistakes to avoid while selling online

5 e-Commerce mistakes to avoid while selling online

E-commerce retail is one of the most profitable industry spaces to be in. But because to err is completely human, many retailers end up making mistakes, big or small and that can leave a bad taste in their mouth about the e-commerce business.

Here are the top five mistakes most people make:

Choosing the wrong platform

Investing in a wrong platform could also result in loss of revenue, conversion, traffic, unfriendly user interface, or even security issues. Thus using more time, money, and efforts in fixing the mistake. It is important to choose a platform that will allow you to integrate your current systems, gives you complete control on your store operations, and lets you customize your store the way you want.

Choosing the wrong audience

A great-looking shop and a smart business strategy are only worthwhile when you have the right customers to sell to. Most often than now, retailers cannot clearly define their target audience or don’t spend enough time to determine the micro factors that drive their behavior. And that is a mistake. Even before you make a sales plan you need to know if your audience really needs your product and if they do if your product is really solving their problem. Accordingly, you can use the messaging they understand.

Not building an SEO friendly site

Content is king and your site must obey it. While most retailers give it a second priority, well-written, SEO-friendly content is what actually drives traffic to your site and increases your search engine rankings, among many other things. Every page and product description on your site should be optimized for search engines.

Complex navigation and user journey

A visually appealing website with an undefined user journey is as good as no website. From a holistic and well cut out user experience to an efficient checkout process, online customers need a smooth-sailing shopping experience.

Not building a scalable website

While many make the mistake of not thinking long-term for their e-commerce store, it is essential to be future ready. Keep provisions for new features, more products, at time of expansion in the future.

If you can avoid these key mistakes, so you can have a long-running, successful online store.

Trends-that-will-shape-Indian-eCommerce-in-2019

Trends that will shape Indian eCommerce in 2019

A lot has changed in the Indian eCommerce landscape in the last few years. As we move into another year towards the future, we see constantly changing eCommerce trends and take a new shape to cater to the more evolved audience.

What to look out for in eCommerce Trends 2019

Voice-activated searches

With easy voice searches enabled by AIs like Alexa, Siri, or Google, search engines like Google has made radical changes to its search result algorithms. This basically means that search will be more specific and yield specific results. This means the product discovery journey for users will also change and eCommerce brands will focus on such shifting trends in defining their search marketing strategy.

Vernacular aided experience

While India’s literacy rate is nearly 75%, those literate in basic English language is only 10% (125 million approximately). However, on the other hand, internet users in the country add up to nearly 481 million. Thus to fill the gap of linguistic preferences to internet usage, many eCommerce brands have already introduced regional language sites and this will continue to grow this year with more language options and more retailers trying to expand their audience base.

More omnichannel presence

While multi-channel has been the trend of 2018, omnichannel marketing will find its presence in eCommerce trends of this year, which will blur the lines between offline and online commerce. Brands will be mapping their user journey across channels and finally transition from multi-channel and detached presence to an integrated, omnichannel presence.

Refined product search

While social search has already been adopted by brands, it will only become more common and pervasive. This will also reduce the number of searches (for eCommerce products) on search engines and brands will most likely spend more advertising dollars on social marketing and other marketplaces.

Augmented Reality and Virtual Reality

Another interesting and rising trend in the retail business worth paying attention to is the integration of Virtual Reality in user experience. This year this is most likely to get leveraged further. By 2020, experts expect retailers to invest in Augmented Reality as well.

Ecommerce frauds

E-commerce Frauds: Risks, measures, and online implications

Online fraud is one of the biggest risk faced by eCommerce enterprises with global retail frauds rising to 30% by 2017. eCommerce fraud typically refers to any illegal or false transactions that take place across online stores. Hackers usually source card information of random users and use the data to make fraudulent transactions or share the data with other hackers

Assessing risks and measures of losses

As an online retailer, here are few ways to assess if there is a fraudulent transaction has taken/is taking place on your web store.

  • The order value and size is bigger than your store average
  • There is a request for fast shipping.
  • The delivery address is a little unusual.
  • The shipping and the billing addresses are not the same.
  • There are several cards used on the IP address
  • The user has multiple shipping addresses.
  • There are large quantities of the same product or multiple transactions in a short span of time.

The total cost of fraud can be measured as Direct Losses to fraud + Lost sales + Cost of manual review + Cost of technology (tools used to detect and solve).

Implications of frauds

No matter what causes the fraud, the implications are usually borne by the retailer.

  • Most frauds end up in a ‘chargeback’ to the retailer. Since the hacked card details might belong to a customer, the retailer must return the same amount to the cardholder once a fraudulent transaction takes place.
  • Chargebacks usually come with processing fees, transaction fees, legal fees, or currency conversions, if any, surmounting to a huge sum for the retailer. Along with chargebacks and refunds, retailers also need to measure the overall impact of frauds on their store.
  • Sometimes, if there are too many fraudulent transactions occur, leading to a large amount of chargebacks, the retailer is usually considered to be a high-risk merchant.
  • Furthermore, the product/s fraudulently sold is a product lost, since there is no ‘return’ of the physical product.

To prevent such scenarios from occurring on your store, always have clear shipping, refund, and return policies and address any unusual activity right when they occur. For smarter store management, resort to a trusted and reliable eCommerce development company like Magento and enjoy a safer retail business.

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