eBay India Lesson: Not All E-Commerce Sites Are Worth Investing!

Preface

Investing in a budding e-commerce business seems to be a good idea and should turn out to be a multi-bagger. However, there is a caveat. You have to do your due diligence before investing; first as a customer, then as a stock analyst. Let me explain this with relation to my online shopping experience with eBay India.

Unable to cope up with the meddlings of my son, my previous 11-year-old TV gave up around five-six months back! Left it as it is for months, as none of us crave to watch TV. It was just a minor repair. However, I was unable to fix it. I couldn’t get its spares. The spares are not available in the market now. We were missing the news and current affairs. So I decided to buy a new TV online. After some research online, I decided to buy a Micromax 50 inch LED TV. Comparatively, it was available at a huge discount with respect to the other brands in the market. After some search, I found the lowest quote for a new one at eBay India for Rs. 35,714/-. There started my bad luck!

eBay India didn’t refund the money as promised

The first thing I would look for is the trustworthiness of the shopping site itself. eBay India Guarantee promises an automatic refund if the seller didn’t enter the shipping details into the system within 3 days of purchase or if the item is not delivered after 7 days of entering the shipping details! Moreover, the particular listing that I bought promised the item to be delivered in 4-7 working days. However, the reality is far from the promise. eBay India didn’t initiate an automatic refund after 3 or 7 days respectively as promised. I paid for the item through credit card on October 11, 2014. The seller entered an air waybill tracking number into the system only on October 22, 2014. However, eBay didn’t initiate an automatic refund until that time. Isn’t it a breach of trust?

eBay India favors only sellers

The business of eBay India is very simple. It allows sellers to list products with a price tag. Anybody interested to buy the product pays for it. eBay informs the seller about the sale, the seller delivers the product, eBay takes its cut and pays the remaining to the seller. Since sellers give eBay regular business, I found eBay biased towards sellers. Let me tell you why.

As I said earlier, the seller kept mum for 10 days. eBay didn’t initiate an automatic refund as per its policy. On the eleventh day (October 22, 2014), the seller entered a tracking number on to the system pertaining to logistics service provider Gati. That made me (as well as eBay) believe that the item has been shipped. Nevertheless, I came to know the waybill was fake with subsequent tracking for one week! Sensing that I have fallen into the trap of a fraudster, I initiated a refund claim with eBay on the morning of October 31, 2014.

However, the same evening the seller mailed me another tracking number, this time pertaining to the logistics provider FedEx. But, he didn’t ship the item until November 3^rd. For some reasons known only to eBay India and the seller, the seller shipped the TV on November 3^rd. It started moving from the seller’s premises to FedEx and thereon to my address. Based on the new tracking number provided by the seller, eBay put my refund request on hold! Doesn’t it clearly indicate that eBay favors only the sellers and cares a damn about buyers even 20 days after paying for an item? Doesn’t it indicate that eBay is unhappy losing its cut of the money and colludes with sellers rather than caring for its customers?

eBay India has terrible customer support

For any large scale, customer-centric business to be successful, there should be a friendly, easily accessible customer support service. eBay India Customer Care can be reached over three modes; phone, instant messenger, and email. However, reaching them over the first two modes anytime is a nightmare with terrible wait times; you should wait at least 1-1/2 hours to reach somebody at the other end! Forget about email, as it is no better than snail mail!

eBay India’s refund process is a heck of a trouble

To gain the confidence of online customers, any genuine refund claim should be swiftly processed. However, as eBay India is allergic to losing its cut of the transaction, it is a lethargic process. The onus of proving the claim to be genuine rests with the customer! Let me tell you in detail.

As I said earlier, I made a refund claim on October 31, 2014. The seller shipped the TV only on November 3, 2014. I had proved eBay that the shipping details given earlier were all fake, and nothing had moved for 20 days since I paid for the item. eBay could have very well refunded my money. However, it was reluctant to part with the money. Instead, it gave the seller ample time to really ship and deliver the item the second time.

Finally, the TV arrived on November 10, 2014. Installation was supposed to be done by the maker itself. Hence I called Micromax Customer Care and requested them to do the demonstration and installation. They obliged and sent me the service personnel the next day. When the service person opened the carton, to their surprise the TV screen was broken! The service personnel asked me to report the damage to eBay. He left after duly receiving my signature on the log sheet with the remarks that the TV was found to be broken when unboxed.

Heck of trouble in returning the item

Again I got back to eBay India on November 11, 2014. I informed them that the item was found to be broken when unboxed by the Micromax service personnel. I provided them the necessary proofs such as photographs taken by the Micromax personnel of the damaged TV. Consequently, I requested eBay India to either provide me a replacement or refund the amount. It took another four days for eBay India to just respond. On November 15, 2014, eBay customer care executive phoned and requested me to reship the item back to the seller through courier and provide them the proof, the reshipped air waybill. An assurance was given that the cost of reshipping would be refunded, and demand-draft is the mode of refund of this expense. He also expressed the inability to replace the item citing the frustration that would occur if the replaced item also gets damaged in transit!

I reshipped the item back to the seller and mailed eBay the scanned copies of the air waybill. So, for the refund of the initial amount of Rs 35,714/-, I had to again bear an expense of Rs 6540/-. Good money going after the bad! Unless you are in a position to bear this expense, your original amount cannot be recouped!

eBay again sat mum on it for another week and got back to me on November 22, 2014, to inform me that the refund claim has been approved. A whopping 22 days of running wall to post since I initiated the claim! Will I again shop on eBay India? Never! And would never recommend/advise anybody too!

eBay India doesn’t store items in its warehouse

We often see the news of fooling online shoppers in India. In the same period that I was facing the great humiliation I said above, another online shopper received soap and brick from another e-shopping site instead of a smartphone. To allay such fear and to gain the confidence of Indian consumers, e-commerce sites are wooing customers with cash-on-delivery option. Furthermore, to safeguard from such fraudulent practices, companies warehouse the items in their own premises before selling them. Unlike other players in this niche viz., Amazon, eBay India doesn’t keep the listed items in its premises. Sellers keep the items with themselves and ship them once eBay intimates them. This is another flaw that I noticed with eBay India.

Bottom Line

All these adversities that I noted while shopping online at eBay India will keep repeat customers away which is not good for a retail business to thrive. Unless eBay India addresses these riddles sooner, I don’t think it could prolong forever in India. Though e-shopping seems to have a huge untapped opportunity, not all sites (companies) that have forayed into it could turn out to be successful or are either investment-worthy. My bitter experience with eBay India proves it not to be customer friendly unless it changes its policies.

Although eBay India is not a listed company on Indian bourses, the point that I would like to drive home is that not all the e-commerce companies are investment-worthy. Do your due diligence both with the numbers and as a customer before you buy any one of them if they come up with an IPO or is available in Indian bourses sometime down the line.