Latest news with #Flipkart-backed
Mint
03-07-2025
- Business
- Mint
Return fraud is rising. E-commerce platforms are done playing nice
Bengaluru: A designer dress is returned—only it's been swapped for a used T-shirt. In another case, fraudsters created fake accounts and dummy addresses to claim ₹1.1 crore in refunds from Myntra, without returning a single product. These aren't isolated incidents. E-commerce platforms say they're part of a fast-growing pattern of return fraud that's costing the industry thousands of crores. As fraudulent claims surge, platforms are rethinking their once-liberal return policies—an issue that's quietly eating into margins and prompting course corrections across the industry. While genuine returns remain a core part of the online shopping experience, platforms say deliberate misuse—through false delivery claims or product swaps—is rising fast. According to Vanita Pandey, chief marketing officer at global compliance and fraud prevention firm Bureau, Indian e-retailers lost as much as ₹15,000 crore ($1.8 billion) to e-commerce fraud in FY24, a category that includes return-related abuse among other forms of digital fraud. More recent data was not available. Mint asked several leading e-commerce platforms for data on return rates and return fraud. Most did not respond. Myntra and Zepto were the only companies that shared comments, though neither disclosed figures. Flipkart, Amazon, Meesho, Purplle, and Nykaa did not respond to emailed queries. Quick-commerce players Swiggy and Blinkit also declined to comment. While platforms don't publicly disclose return volumes, industry estimates suggest return fraud may account for around 10% of all returns in Indian e-commerce. Overall, about 15–16% of all e-commerce orders are either partially or fully returned, according to research firm Forrester. Globally, e-commerce firms lost an estimated $103 billion to return fraud in 2024. Platforms have long relied on easy returns to attract and retain customers. But reverse logistics—often costlier than forward shipping—has made the model increasingly unsustainable. The shift comes at a pivotal moment: even as online shopping expands into newer geographies, companies are still posting significant losses. Flipkart's marketplace business reported a loss of ₹2,358 crore in FY24, while Amazon's touched ₹3,469 crore. 'While some part of the fraud is being done by bots, consumers too are increasingly exploiting policies," said Pandey. 'Instances of fraud in India are significant simply by virtue of the size of the country. And it's getting more sophisticated." To counter this, e-commerce platforms are rolling out tighter rules. Customer experience vs fraud control Flipkart-backed Myntra, for instance, unilaterally suspends accounts with high return rates and disables cash-on-delivery for users who frequently cancel or reject orders. The platform also collects a fee on low-value orders and now permits exchanges for different products—not just size or colour—as a way to reduce return volumes. It has also introduced features such as detailed product information and virtual try-ons to help customers make better purchase decisions. 'In recent months, we have improved the return rates while enhancing the shopping journey of our customers," a Myntra spokesperson said. Amazon has shortened the return window for categories like fashion, home décor, and accessories to 7 days from 30, and reserves the right to warn or suspend users for excessive returns or cancellations. Marketplaces have been tightening return policies gradually over the past few years. In 2023, Myntra began charging ₹199– ₹299 for customers with a high return rate. But as return fraud continues to rise, platforms are now scrutinising customer behaviour more closely. Quick commerce companies like Blinkit, Swiggy Instamart, and Zepto—while newer to the space—are also adapting. These platforms had introduced easy return options last year, but their smaller product ranges have limited exposure to the kind of refund fraud plaguing broader e-commerce. 'We verify every return request, and if it's genuine, we go ahead and process it," said a Zepto spokesperson. 'Returns are also easier to manage on our platform since our delivery partners operate within a defined, local radius." D2C brands feel the heat Direct-to-consumer (D2C) brands are facing the impact as well. Chirag Taneja, co-founder and CEO of enablement platform GoKwik, said about 12% of customers return at least half of six orders, raising concerns for companies selling through their own websites. GoKwik works with over 4,000 brands including Lenskart, Shoppers Stop, and Purplle. 'Some categories are easier to exploit than others," Taneja said. 'Fashion and general merchandise see higher return rates than beauty and consumer electronics, where policies are generally stricter." According to a 2024 report by GoKwik's Return Prime, frequent returns could cost Indian e-commerce companies $20-30 billion in lost revenue by 2025. This compares to an industry expected to touch $188 billion in size by then, according to the Brand Equity India Foundation citing Grant Thornton estimates. India's online shopping gross merchandise value (GMV) stood at around $60 billion in 2024 and is projected to grow to $170-190 billion by 2030, according to a report by Flipkart and Bain & Co. Independent experts say the rise in returns—and the resulting policy pushback—could reshape customer experience. Ashutosh Sharma, vice president and research director at Forrester, said this significantly impacts margins and can be especially challenging for newer players. 'The abuse by a few makes it difficult for providers to continue with customer-friendly features such as shorter return windows or no-cost returns, which leads to an overall impairment in the experience," Sharma said. Sharma also flagged problems on the seller side. 'Platforms prone to returns like apparel and fashion have introduced some checks, but they still need to tidy the ship on their side," he said. 'We still have issues such as incorrect or incomplete descriptions, delivery of wrong or defective products, or in some cases, outright fraud—all of which contribute to returns." The challenge for platforms is to strike a balance. Taneja said brands that remove easy-return policies risk losing up to 50% of their GMV, especially as most online shoppers prefer brands that offer hassle-free returns. A poor return experience can also cost brands 8% in potential repeat revenue annually, according to GoKwik data. 'The no-questions-asked policy is being closely scrutinized because of growing cases of misuse. But returns continue to be an integral part of the customer experience, so no brand will completely stop returns," Taneja added.
Economic Times
01-07-2025
- Business
- Economic Times
Shadowfax files confidential prospectus for its IPO
Company Images Hyperlocal logistics player Shadowfax has filed the draft red herring prospectus for its initial public offering (IPO) with markets regulator Sebi, taking the confidential route, according to a newspaper advertisement by the company. ET had first reported on June 27 that the Flipkart-backed company was on the verge of filing papers for its Rs 2,000-2,500 crore IPO, of which about half is expected to be in the form of a primary issue. By filing confidentially, the firm can gauge investor interest and finetune its IPO plans without immediately disclosing financials and other sensitive business information. Most of the Rs 1,000-1,100 crore to be raised from the primary share sale is expected to be invested in bulking up the company's quick-delivery offerings. 'The company has been seeing massive traction emerging from quick deliveries…and its economics have also been improving,' a person in the know had told ET fiscal year 2024, Shadowfax clocked around Rs 1,885 crore in operating revenue, up 33% from the previous year, and turned operationally profitable. It reported a net loss of Rs 12 crore for FY24, down 92% year-on-year, but posted earnings before interest, taxes, depreciation and amortisation (Ebitda) of Rs 23 the filing done, Shadowfax joins a long list of new-age companies that have submitted their draft papers to the markets regulator. The others are PhysicsWallah, Boat, Urban Company, Shiprocket, Groww, Capillary Technologies, Pine Labs, Wakefit and Curefoods. Meesho and Lenskart are also expected to file their papers soon. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Inside TechM CEO's 'baptism by fire' and the blaze he still needs to douse How the sinking of MSC Elsa 3 exposed India's maritime blind spots Profits plenty, prices attractive, still PSU stocks languish. Why? The bike taxi dreams of Rapido, Uber, and Ola just got a jolt. But they're winning public favour Stock Radar: Indus Tower stock breaks out from Symmetrical Triangle pattern; could hit fresh 52-week high – check target & stop loss Weekly Top Picks: These stocks scored 10 on 10 on Stock Reports Plus Will worst of perception be over in Q1 earning season? 9 IT stocks, probably best contrarian bets. Use a different way to be contrarian Stock picks of the week: 5 stocks with consistent score improvement and return potential of more than 25% in 1 year No trending terms available.
Economic Times
01-07-2025
- Business
- Economic Times
Shadowfax files IPO papers; UPI cools in June
Logistics firm Shadowfax has become the latest new-age company to confidentially file for its IPO. This and more in today's ETtech Top 5. Also in the letter: ■ India's unicorn check ■ AI talent war rages on■ VCs' AI flight Shadowfax files confidential prospectus for its IPO (L-R), Vaibhav Khandelwal, Praharsh Chandra, Gaurav Jaithliya & Abhishek Bansal, cofounders, Shadowfax Hyperlocal logistics firm Shadowfax has filed a draft red herring prospectus (DRHP) with Sebi under the confidential route, as per a newspaper advertisement. Why it matters: The Flipkart-backed company is seeking to raise Rs 2,000-2,500 crore through its IPO, with approximately half of the funds coming from a primary share issue. By filing confidentially, Shadowfax can gauge investor appetite and tweak its offer terms without immediately putting sensitive financials into the public domain. ET reported on June 27 about Shadowfax's plans for a confidential filing. By the numbers: FY24 operating revenue: Rs 1,885 crore (up 33% YoY) Rs 1,885 crore (up 33% YoY) Ebitda: Rs 23 crore Rs 23 crore Net loss: Rs 12 crore (down 92% YoY) What's next: The company plans to deploy Rs 1,000-1,100 crore from the primary proceeds to scale up its quick-commerce delivery vertical, which is gaining momentum and showing healthier margins. The big picture: Shadowfax is part of a broader wave of new-age startups gearing up to go public. Others in the queue include PhysicsWallah, Curefoods, Urban Company, Capillary Technologies, Groww, Pine Labs, and Wakefit. Under the radar: Following Swiggy's confidential draft filing last year, a growing number of new-age companies are opting for the same route. Shadowfax, along with PhysicsWallah, Groww, Shiprocket, and Boat, have all submitted their draft papers confidentially. Also Read: What is confidential IPO filing, and why do startups choose it? UPI sees marginal dip in June transactions, value down 4% The Unified Payments Interface (UPI), operated by the National Payments Corporation of India (NPCI), recorded a marginal dip in both transaction volume and value in June. By the numbers: UPI processed 18.40 billion transactions during the month, slightly down from 18.68 billion in May. The total value fell 4% to Rs 24.04 lakh crore from Rs 25.14 lakh crore, according to NPCI data released on July 1. What's behind the dip? Industry executives pointed to seasonal factors. May saw a boost from high-volume events, such as the Indian Premier League, which weren't present in June. Still, they noted that year-on-year volume growth remains strong and most expect the overall upward trend to hold. UPI also faced multiple service disruptions recently, affecting users of Google Pay, PhonePe, Paytm, and banking apps. NPCI blamed the April 12 outage on a surge in API requests from certain banks. Other channels The Immediate Payment Service (IMPS) processed 448 million transactions worth Rs 6.06 lakh crore, down from 464 million transactions worth Rs 6.41 lakh crore in May. Aadhaar Enabled Payment System (AePS) volumes slipped to 97 million from 105 million. FASTag transactions reached 386 million, down from 404 million. NPCI financials: NPCI reported a 41.7% jump in net profit to Rs 1,552 crore for FY25. As a not-for-profit, this is booked as a revenue surplus. Standalone revenue rose 19% to Rs 3,270 crore in FY25 from Rs 2,749 crore in FY24. Sponsor ETtech Top 5 & Morning Dispatch! Why it matters: ETtech Top 5 and Morning Dispatch are must-reads for India's tech and business leaders, including startup founders, investors, policy makers, industry insiders and employees. The opportunity: Reach a highly engaged audience of decision-makers. Boost your brand's visibility among the tech-savvy community. Custom sponsorship options to align with your brand's goals. What's next: Interested? Reach out to us at spotlightpartner@ to explore sponsorship opportunities. India mints only five unicorns so far; investors say 2021-style boom unlikely to return India's startup ecosystem kicked off 2025 on a high, with fleet-management company Netradyne hitting unicorn status early in the year. But, six months in, just four others – Porter, Drools, BlueStone, and Jumbotail – have joined the club. Fall from the peak: That's a far cry from the heady days of 2021, when India minted 45 unicorns in a single year. Most investors now view that as a one-off, fuelled by ultra-low interest rates, a post-pandemic digital surge, and aggressive global capital. That environment, they agree, isn't coming back. Yearwise: The number of unicorns in India since 2021: 2021: 45 45 2022: 22 22 2023: 2 2 2024: 6 6 2025: 5, till June 30. Tread lightly: Following 2021, investors have become far more selective. The emphasis has moved from blitzscaling to building more sustainable businesses. Metrics like unit economics, burn rate, and gross margins now carry more weight than topline growth alone. Also Read: SoftBank-backed Netradyne, India's first unicorn of 2025, eyes profitability by year-end Investor take: 'Fund managers are now strongly committed to thesis-driven investing and a metric-driven valuation approach. This has led to more appropriate valuations in new funding rounds. This is most visible in the slower pace of new unicorn creations in India,' Abhishek Prasad, managing partner, Cornerstone Ventures, told ET. Also Read: Dhan closes in on $200 million fundraise from ChrysCap, Alpha Wave, MUFG AI talent war: OpenAI acquihires the team behind Crossing Mind Sam Altman, CEO, OpenAI and Mark Zuckerberg, CEO, Meta There's a meme doing the rounds on X: 'On the left is Ronaldo. Real Madrid paid $80M to sign him from Man United. On the right is Jiahui Yu. Meta paid $100M to sign him from OpenAI.' It's funny, but it captures the serious, high-stakes race for AI talent in Silicon Valley. Driving the news: On Monday, Meta showed just how aggressive it's getting. In a major announcement, CEO Mark Zuckerberg introduced Meta Superintelligence Labs, a new unit that will lead its AI charge. The team includes 11 top researchers poached from OpenAI, Anthropic and Google. Shopping on: OpenAI, feeling the heat, has responded with an acquihire of its own. It picked up the team behind Crossing Minds, known for building AI recommendation tools for ecommerce. This follows a string of buys, including io, Windsurf, Rockset and Digital Illumination, as it doubles down on product and research talent. VCs on AI flight to Valley A growing number of Indian venture capital firms are heading to San Francisco to plug into the US AI boom and catch the next big wave before it hits home. Taking flight: Elevation Capital and Peak XV Partners have established a presence in Silicon Valley. Others like Blume Ventures are making regular trips there as the region's AI energy picks up. Elevation Capital has brought on Capillary Tech cofounder Krishna Mehra to anchor its US presence. Peak XV has opened a San Francisco office and tapped ex-Y Combinator principal Arnav Sahu to lead deals. Sources indicate that VC firm Z47 is also seeking to build out its US footprint. Insider's take: Two Bengaluru-based investors told ET they're flying out more often to track cutting-edge developments. 'Travelling there is eye-opening in terms of what is happening in AI and the kind of talent density that is available there,' one investor said. Updated On Jul 01, 2025, 07:51 PM IST
Economic Times
12-06-2025
- Business
- Economic Times
Paytm shares crash 10% as Finance Ministry dismisses MDR speculation
Paytm share price plummeted by 10% following the Finance Ministry's denial of impending MDR charges on UPI payments, a fee banks charge merchants. This clarification countered reports suggesting MDR imposition on large UPI transactions. The Payments Council of India had previously requested MDR reintroduction. UPI continues its dominance, processing 18.68 billion transactions in May, totaling ₹25. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Shares of One 97 Communications , which runs the payments platform Paytm , on Thursday fell up to 10% to the day's low at Rs864.20 on BSE after the Finance Ministry dismissed reports about the possible introduction of a merchant discount rate (MDR) for UPI or payment services providers like Paytm earn a fee, which is called MDR, from merchants for processing payments in real time. To promote digital payments, the government has waived MDR charges on UPI several reports circulated online claiming that the government was planning to impose MDR on large-ticket UPI baseless and sensational speculations cause unnecessary uncertainty, fear, and suspicion among our citizens, the ministry said in a strongly worded March, the Payments Council of India , which represents digital payment companies, wrote to Prime Minister Narendra Modi seeking the reintroduction of the MDR on UPI and RuPay debit card transactions. The industry body recommended a 0.3% MDR on UPI payments for large merchants and a nominal MDR on RuPay debit card transactions for all of April, PhonePe and Google Pay continue to dominate the space, accounting for over 80% of UPI market share. Newer players such as Flipkart-backed Super. Money, Navi, BHIM, and Cred are gradually increasing their presence through cashback offers and other UPI processed 18.68 billion transactions in May. In value terms, UPI transactions totalled 25.14 lakh crore rupees in May, up from 23.95 lakh crore rupees in May figures also mark a 33 per cent year-on-year jump in transaction volume, compared to 14.03 billion transactions recorded in the same month last year. The average daily transaction amount for May stood at 81,106 crore rupees, while the average daily transaction volume was 602 success of UPI placed India in a leadership position with a share of 48.5 per cent in global real-time payments by volume.
Time of India
12-06-2025
- Business
- Time of India
Paytm shares crash 10% as Finance Ministry dismisses MDR speculation
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Shares of One 97 Communications , which runs the payments platform Paytm , on Thursday fell up to 10% to the day's low at Rs864.20 on BSE after the Finance Ministry dismissed reports about the possible introduction of a merchant discount rate (MDR) for UPI or payment services providers like Paytm earn a fee, which is called MDR, from merchants for processing payments in real time. To promote digital payments, the government has waived MDR charges on UPI several reports circulated online claiming that the government was planning to impose MDR on large-ticket UPI baseless and sensational speculations cause unnecessary uncertainty, fear, and suspicion among our citizens, the ministry said in a strongly worded March, the Payments Council of India , which represents digital payment companies, wrote to Prime Minister Narendra Modi seeking the reintroduction of the MDR on UPI and RuPay debit card transactions. The industry body recommended a 0.3% MDR on UPI payments for large merchants and a nominal MDR on RuPay debit card transactions for all of April, PhonePe and Google Pay continue to dominate the space, accounting for over 80% of UPI market share. Newer players such as Flipkart-backed Super. Money, Navi, BHIM, and Cred are gradually increasing their presence through cashback offers and other UPI processed 18.68 billion transactions in May. In value terms, UPI transactions totalled 25.14 lakh crore rupees in May, up from 23.95 lakh crore rupees in May figures also mark a 33 per cent year-on-year jump in transaction volume, compared to 14.03 billion transactions recorded in the same month last year. The average daily transaction amount for May stood at 81,106 crore rupees, while the average daily transaction volume was 602 success of UPI placed India in a leadership position with a share of 48.5 per cent in global real-time payments by volume.
