LUCKNOW: India’s largest e-commerce dealer Flipkart has stopped delivering consignments worth more than Rs 10,000 to customers in Uttar Pradesh, including NCR regions of Noida and Ghaziabad. While Flipkart said the decision was “purely business oriented”, insiders said there were numerous instances of customers ordering expensive goods on the cash on delivery scheme and refusing to accept their orders. There have also been cases of fraud in which lost or stolen credit cards were used to book orders online.
The company said it was a conscious business decision and refused to give details that led to the money cap in UP, the most populous state in the country which also happens to be the largest consumer base for all trading companies.
The portal’s shipment delivery staff in Lucknow, however, gave insight, saying there were incidents in which customers ordered expensive goods and then refused to accept them. Sources said many people logged on to Flipkart and ordered “just for fun”.
“It takes a minimum of 10 days to ship a product to a customer and back to the company if it’s not purchased. It causes loss to sellers, selling through Flipkart, as their products get blocked in transit,” a senior Flipkart executive told TOI.
A lot of logistical cost is added while moving an order from the company’s warehouse to a consumer. This included shipping and insurance costs, especially in case of expensive products, besides state taxes. The transportation cost is in proportion to a products’ value, hence return of any expensive product would mean incurring greater loss than rejection of a small value order, priced less than Rs 10,000.
“A company takes such extreme decisions only when its overall profitability gets affected while delivering high value products. While delivering across the nation, a company has to comply with a lot of taxation policies of state governments. Scaling up the order value means increasing the risk factor,” commented the portal’s nearest competitor in the country.