Indian e-commerce companies were allowed to resume sales of non-essentials barely a month ago, but sales—and discounts—are already flying thick and fast. Especially in apparel, considering the particularly fickle nature of fashion cycles. Amazon’s week-long ‘Wardrobe Refresh’ sale ends on 25 June, while fashion e-tailer Myntra’s four-day ‘End of Reason Sale’ ended on Monday. Flipkart is smack bang in the middle of a five-day sale that ends on 27 June. 

Maybe it’s a sign that things are moving back to normal. Myntra Myntra The Ken Myntra changes its style to fit Walmart’s designs Read more , owned by Amazon’s top rival Flipkart, had around 2.8 million shoppers during the same sale last year. It topped that number with 3.5 million this time. 

More shoppers, though, may not translate to higher earnings for the thousands of brands and sellers on e-commerce platforms. And that’s due to returns. 

  1. The fashion segment—apparel, shoes, and bags—has a 30-day window for return or replacement, while most other categories on e-commerce platforms have only a 10-15 day window.
  2. Non-returnable items like socks, lingerie, and beauty products account only for single-digit sales in e-commerce.
  3. Which means that at about 30%, fashion has the highest return rate among all categories, several brands and industry executives told The Ken.
  4. It’s also the sellers who foot the logistics bill for returns; this includes costs for both delivery and the return. 

Notably, all this was before the coronavirus pandemic struck. The post-lockdown situation is much more severe. 

While fashion’s return policies have remained largely unchanged, the new safety- and hygiene-conscious shopper has added to the sellers’ headache. Clothes are the most intimate of all products. And when they’re returned, they have to be put through several sanitisation hoops. From isolating the clothes for 24-48 hours, sanitising the packaging, sterilising clothes in UV chambers, to, of course, washing and steam-ironing them before they’re repackaged. This has led to a 25-30% jump in operational costs, four brands told The Ken

This also means it takes longer for sellers to get their inventory back on the market. “It takes at least three to four days to get your inventory back online now. On 30-40% returns, you are practically not making any money. For someone who has heavy returns, the inventory turnover is a risk,” a seller of women’s casual wear told The Ken. They declined to be named since they conduct business with most major fashion e-tailers. 

Handling returns

Logistics costs on returns are higher than delivery costs—as much as 38% more in case of shirts, pants, tops, and skirts, according to a copy of Myntra’s cost sheet accessed by The Ken

Sellers, trade bodies, and associations have opposed the as-you-please returns that e-commerce companies afford apparel shoppers.

AUTHOR

Abinaya Vijayaraghavan

Abinaya is a Bengaluru-based writer, covering the sprawling and exciting world of Indian e-commerce. When she is not trying to understand alpha sellers and complex supply chains, she enjoys travelling and playing badminton. Abinaya was previously a reporter at Reuters.

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