Info-tech

GOQii serves contempt of court notice to Flipkart

Sangeetha Chengappa Bengaluru | Updated on June 03, 2019 Published on June 03, 2019

Smart wearables’ maker GOQii’s ongoing dispute with Flipkart is set to play out in court this week.

Sources told BusinessLine that as a consequence of its products being sold at a 70-80 per cent discount below cost price on Flipkart, the Ratan-Tata backed GOQii has lost orders of over 5-8 lakh units from corporates, brands and distributors. This was despite the Bombay Civil Court ordering Flipkart and its sellers — Tech-Connect and Retailnet — to stop selling GOQii products last week.

“Instead of removing GOQii products from the sale, Flipkart said ‘coming soon’ against the products, whereby customers can click and be notified when the product would be available. This amounts to mocking the court order,” a source said.

“It was only after GOQii sent a contempt of court notice to Flipkart last Tuesday, that all GOQii products were taken down from the marketplace. The start-up has no other choice but to resolve the matter once and for all in court,” the source added.

Refurbished products sold

To compound matters, many of the GOQii products sold on Flipkart are believed to be fake or refurbished, as customer complaints of empty boxes, scratched products, broken seals and missing activation cards continued to pour in to GOQii last week.

“Sad to see the plight of customers who got @GOQii from @Flipkart during deep discount sale. We care for the health of our users & provide them free replacements. Apart from business losses, big brand reputation loss,” tweeted Vishal Gondal, founder and CEO, GOQii.

While many brands like GOQii do offer discounts during sale events on Flipkart, they are done based on mutually agreed discount rates.

However, these products are rarely sold below cost price.

Large marketplaces cover their bases by drawing up legal contracts with sellers, which generally places the onus of deciding the pricing entirely on the latter, said K Vaitheeswaran, author, e-commerce pioneer, and co-founder of Again Drinks.

“Sellers are often pressurised by marketplaces to offer unreasonably large discounts. So, they have to either tow the line or face the prospect of being blacklisted by the marketplaces. To find ways and means of lowering their business losses, these sellers may resort to sourcing used and refurbished products, which they sell on the marketplaces,” he said.

‘Serious look needed’

A Flipkart spokesperson 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.”

Asked when the ongoing fracas between GOQii and Flipkart would be resolved, Vishal Gondal, CEO and founder GOQii said: “Deep discounting and predatory pricing is detrimental to the growth of India’s e-commerce ecosystem. The government and policy makers need to have a serious look at the current situation and develop measures to protect the interest of Indian SMEs. We have seen this first-hand and have suffered heavy business losses.”

GOQii, has over two million paid subscribers. The start-up does not charge for the device. Users are charged subscription fees for quarterly, half-yearly and annual plans that offer users services such as personal health coaching, tele-consultation with doctors and health experts, and second opinion on medical reports.

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Published on June 03, 2019
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