Deep discounting tarnished GOQii brand; all eyes on Flipkart's defence in Court

Big Billion Days!

Great India Sale!

70% off!

80% off!

Sold.

And…often returned.

Remember when you or your acquaintance ordered a super cheap product and found out that it was tampered, broken, or started malfunctioning after a couple of weeks and you either deemed it a fake or tried to exchange or return it? Of course.

But more importantly, do you remember how those experiences shaped your attitude towards the product’s brand?

“Such a fake brand. What a scam!”

“Of course the products are cheap. Such poor quality.”

“Never ordering from this brand again.”

But what if it wasn’t the brand’s fault? What if the prices were controlled by the marketplace, and so, were the products being sold on the website under that brand’s name?

You see what I’m getting at. This backlash is what GOQii faced from its customers in lieu of the deeply discounted product sale by Flipkart over the marketplace platform. In this manner, their market rep was tarnished to such an extent that their contractors also withdrew from the respective agreements, and customers cancelled orders. The company was driven to bankruptcy, reveals the Founder - Vishal Gondal to CNBC.

And this is why GOQii had to come forward to fight this battle, and try to repair the damage. The first step was the legal case on Flipkart, which turned into a battle that is still going on. “The next hearing is scheduled around 6-7th June, and Flipkart has armoured itself by hiring Shardul Amarchand Mangaldas as a lawyer for the case,” revealed a source in a conversation with Entrackr on the condition of anonymity.

The second step that GOQii has taken is to salvage its reputation amongst the consumers and ensure that the harm caused to them in the process is taken care of. Why? It is a health-tech brand and anything going wrong with health monitoring products means a possible life harm to the customers, one thing a business alike GOQii cannot afford.

“GOQii could not let its customer suffer due to the sale and hence it is proposing a free replacement of defective products to the users,” revealed the above-mentioned source.

The rumors are that Flipkart has been hoarding fake replicas to sell at a lower price. “Otherwise, selling the product at a price lower than manufacturing cost would make no sense,” added the source.

There have been contentions in the ecosystem, that e-commerce marketplaces sometimes to afford selling products at such cheap prices engage in scouting fakes from markets like Gaffar and Nehru Place and then sells them on the platform.

Not just this, Flipkart has announced its own private label to target sports and fitness conscious audience under the name Adrenex which is slated to have more than 220 products of various categories. Is this just damage control, or a way to sell the inventory that it cannot sell because the court has banned it from selling GOQii products on the platform? Time will tell.

Flipkart in it's response said, "We take legal compliance seriously and we are fully compliant with Indian Law. This is a legal matter with a supplier and we cannot comment on the details of a legal case, but we are engaged with the supplier to come to a swift resolution.”

On the other hand, queries sent to Shardul Amarchand Mangaldas did not elicit response until early Tuesday (June 4).

For now, the matter hasn’t ended at all. Court hearings are still pending, AIOVA is following the developments to support GOQii till the end, and even the government is consistently engaged in evolving the e-commerce policy for the betterment of sellers and diminishing the scope of exploitation by these large international or internationally backed e-commerce marketplaces.

How Flipkart will manage to weave its way out of this one, only the upcoming Court hearing will decide.