Update at 3:10 pm: CERC compared 25 cosmetic products on Snapdeal and a Nykaa. CERC clarified that it did not conduct an “online survey” but a product comparison. . Here are the study’s main findings:

  • High discount rates indicating counterfeit products: The same product sold on the 2 platforms were 50-92% cheaper on Snapdeal, which CERC believes could be a sign that the product is counterfeit since sellers cannot generally afford such discounts
  • Inflated MRPs, even after discounts: Products on Snapdeal had a higher label price than the product MRP. CERC established this by comparing Snapdeal’s listed MRP with Nykaa’s MRP, and the product MRP on the brand’s website. For instance, The Body Shop Moringa Shower Gel was Rs 325 on Nykaa and on the Body Shop website. However, the listed MRP on Snapdeal was Rs 1095, and even the selling price of Rs 469, even after a discount of 57%, was higher than the MRP
  • Expiry dates not displayed: While Nykaa listed all of the products’ expiry date, Snapdeal did not list even a single product’s expiry data, according to CERC’s findings, stating that expired cosmetics could  cause serious skin and health issues.
  • Product description misleading: CERC claims that there is inconsistency in the product visual and product description, indicating a lapse on Snapdeal’s side

Incomplete product labelling, as examined by CERC. Image Credit: CERC

Meanwhile, Snapdeal told MediaNama that sellers were  responsible for labelling expiry dates, MRPs, retail price offered, month of manufacturing, among other things. Snapdeal being an intermediary, does not carry out display and labelling of the products, it added.

Further, Snapdeal has also said that it has noted CERC’s findings and will investigate and act upon them. Being an intermediary, Snapdeal has a take-down process as lawfully defined, it said. “Verified complaints are acted upon promptly, including delisting products and barring sellers from accessing the marketplace,” a spokesperson said.

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Earlier at 11:10 am: Ahmedabad-based consumers’ rights body Consumer Education and Research Centre (CERC) has written to the Drugs Controller General of India (DCGI) S Eswara Reddy, seeking action against Snapdeal for allegedly selling counterfeit products, reports the Economic Times. The body said that Snapdeal sells counterfeit products, with misleading labels and inflated MRPs. CERC has also copied the letter to Union Commerce Ministry and the union Department of Consumer Affairs, per the report.

The consumer body has asked that Snapdeal should take the following steps:

  • Remove all products with incomplete labelling and inflated MRPs listed on the platform
  • Recall the products sold to customers and compensate them for the “potentially harmful products”
  • Have a transparent policy for listing of vendors and products, and strict action must be taken against vendors violating Snapdeal policy.

CERC’s allegation comes from an online survey it conducted of 25 personal care and cosmetics products sold on Snapdeal and Nykaa. It found that there was a 50-92% price difference of the same products between the two platforms, with the prices presumably being higher on Snapdeal. The body also said that expiry dates for cosmetic product were not present. Neither CERC nor the ET report specify when this survey was conducted, with what intent, for how long and how many users were surveyed.

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Maharashtra, Karnataka have taken Snapdeal to court for similar cases

This is not the first instance where Snapdeal has run into issues regarding intermediary liability.

  • Earlier this month, the Karnataka drugs controller said it would begin prosecution against Snapdeal executives and a Ludhiana-based vendor for allegedly selling prescription drug Suhagra on the platform.
  • In May 2015, the Maharashtra FDA filed a FIR against Snapdeal CEO Kunal Bahl and the company’s directors for selling prescription drugs, including Viagra and emergency contraceptives.
  • Earlier in 2015, a Delhi-based lawyer took Snapdeal and Chennai-based Ohmysecrets.com to court for selling vibrators and abetting gay sex and exhibiting obscene products for violating the section 377 of the Indian Penal Code.

Snapdeal ‘BrandShield’ for sellers

In November, Snapdeal launched ‘Brand Shield’ where companies could report counterfeit products being sold on its platform. Snapdeal claimed that it would take down any listing that infringes third party IP rights within 1 working day after being assured that provided that the violation can be established with evidence, and is reasonable. The feature is limited to seller complaints, and not for users.

Snapdeal’s complete statement:
Snapdeal requires all its sellers to operate in compliance with applicable laws and regulations. As an intermediary connecting buyers with independent third-party sellers, Snapdeal has a well defined take-down process as required by law. Verified complaints are acted upon promptly, including delisting products and barring sellers from accessing the marketplace. We have taken note of the instances cited by CERC and these will be investigated and acted upon swiftly.
The issue of unscrupulous sellers mis-using online marketplaces to sell fake goods is a global problem. Through its anti-counterfeiting initiative, “Brand Shield”, Snapdeal works closely with brands to make it simple for brands to report any instance of counterfeits that may get listed on our marketplace. Post verification of the information provided by the brands, such listings are removed by Snapdeal within one business day.
As required per LM Guidelines GSR 629(E) effective from 1st January 2018, Snapdeal has provided the required fields for sellers to provide information regarding (i) name of manufacturer (ii) country of origin (iii) generic name of the product (iv) Net Qty (v) month and year of manufacturing or packaging (vi) best before / expiry date (where the commodity may become unfit for human consumption) (vi) Retail Sales Price (vii) product dimension ( where applicable). In the case of a marketplace based model of e-commerce, the seller/manufacturer is responsible for the correctness of such declarations.
– Snapdeal’s spokesperson

Read our Snapdeal, e-commerce, and intermediary liability coverage.