25% of online orders returned .

Online Order

Predatory pricing, along with free shipping and generous return policies have helped India's fledgling online retail industry woo millions of customers. But behind the boom lies a growing concern: One out of every four products sold online gets returned, a study by logistics firm Gati showed.

E-tailers are trying hard to curtail the extra cost. "Nearly four lakh shipments are delivered across the country every day, 25% of them are returned, making it a growing concern for e-tailers," says Harshall Bhoi, head of e-commerce operations at Gati.

While a Flipkart spokesperson refused to comment, Vikas Ahuja, chief marketing officer at fashion retail website Myntra, acknowledged the concern. "We are in an industry-building phase currently, and see returns as an investment in building customer experience and trust," he says.

Returned goods push up the average cost of delivery by 50%, adding to the woes of the e-tailers, many of whom are yet to break even. For instance, if the cost of delivering a half-kilo parcel is Rs 45, and it is returned, the subsequent to-and-fro shipment charges hike it to Rs 67.50. So, the total loss to the e-tailing industry only due to shipment costs of returns stands at close to Rs 330 crore a year.

This has got logistics firms working on new business models where instead of couriering the returned product back to the e-tailer, the shipper would store it in a warehouse till a new order for it surfaces. "If proved successful, it would help online retailers save millions of rupees in transit costs," says Bhoi.

"As observed as an industry trend, returns are usually high on 'Cash on Delivery' (CoD) transactions," says Deepa Thomas, eCommerce evangelist at eBay India. "Reasons differ from category to category and they vary from size issues, different colour, model, buyer not available and concerns such as 'damage in transit'."

Product sizing constitutes two-thirds of all returns, according to various e-tailers. Accessories too see high returns. "Usually, jewellery and technology products such as storage devices see least returns," says Thomas.

Some etailers are mining their data to find out ways to make shoppers keep more purchases. "Based on their buying history of various brands, we have introduced a size-recommendation feature to help shoppers make better choices," says Ahuja.

Online retail giant Amazon offers shoppers the option of easy returns and early refunds at various stages of their purchasing cycle. "Once customers place an order on Amazon, we give them half-an-hour to change their mind before we start processing the order. And once the order is processed, we send them a confirmation mail and here again customers have an option of canceling their order," says an Amazon spokesperson.

At Rs 13,000-crore, India's e-tailing industry accounts for just 1% of the total retail business. However, it's the fastest growing segment of e-commerce (non-travel) growing at 59% annually, as per industry estimates.

Source : http://timesofindia.indiatimes.com/business/india-business/25-of-online-orders-returned-study-finds/articleshow/28614022.cms?