Will the new government guidelines curb online fake reviews?

The increasing consumer affinity to transact on e-commerce marketplaces, has opened avenues for various businesses to prosper online. The overall Indian e-commerce market is expected to reach $350 billion by 2030, as per industry reports. It will experience 21.5% growth by the end of 2022.

While this seems like a positive scenario, shopping online also comes with a menace - of dealing with fake reviews. When shopping online, customer reviews become quite crucial, especially for big ticket purchases and categories that are not advertised enough.

In a bid to regulate online reviews, the Department of Consumer Affairs has issued guidelines that aim to put a stop to fake ratings and misleading reviews for products bought on e-commerce marketplaces.

Starting today (November 25, 2022), the guidelines created by the Bureau of Indian Standards (BIS) will be applicable to any online platform which publishes consumer reviews. The guidelines state that the author of the review will have to accept terms and conditions, and provide their contact information. For review administrators, safeguarding personal information and staff training, will be necessary.

These guidelines also provide methods for verification of the author through email address. Then there is identification by telephone call or SMS, confirming registration by clicking on a link, using captcha system, etc., to check the traceability and genuineness of the author.

However, it is important to note that the guidelines will initially be voluntary, but the government will make them mandatory, if fake reviews continue to deceive consumers.

Merits of the government guidelines

K Vaitheeswaran, an e-commerce expert and author of ‘Failing to Succeed’, says that while the intent to come up with these guidelines is good, implementing them will be a big challenge.

The nature of e-commerce is such that people buy products without talking to anybody. They just depend on the product’s descriptions. Hence, honest and fair reviews become important, and impacts the prospective consumers purchase decisions.

Vaitheeswaran adds, “There have been multiple cases in the past, when brands have paid for favourable reviews on e-commerce platforms. Long back, online marketplaces used to verify customer profiles. But that fad died quickly, because it is very easy for brands to make consumers purchase a specific product by luring them with offers.”

Baqar Iftikhar Naqvi, co-founder & CEO of Upriver.in (an online channel management company), also feels that these voluntary guidelines may not be of much help for consumers or e-commerce marketplaces. "Unless e-commerce players have strict measures in place to stop fake reviews, the guidelines are not of much use," he adds.

Explaining this through Amazon’s example, Naqvi says that e-commerce marketplaces mainly work on data points. In case a data deviation is noticed, the platform promptly raises a flag. The brands get a mail from Amazon, saying that it has noticed unusual activity happening on the seller’s account and it should stop any unauthorised activity immediately to avoid getting blacklisted from the platform.

Impact of fake reviews on a brand's image

Talking about how fake reviews impact a brand’s image, Gulshan Singh, chief strategy officer, Tilt Brand Solutions, mentions, “The Indian consumers pride themselves on being smart shoppers, and don’t like being made a fool of. Brands that associate with such a practice, can receive consumer backlash. Brands that have only genuine reviews about products, will be in a much stronger position.”

In an official statement, Rohit Kumar Singh, secretary, Department of Consumer Affairs, informed that while countries globally are dealing with the challenge of fake reviews, India is probably the first country to roll out such guidelines. To adhere to the guidelines, platforms like Amazon and Flipkart will be required to disclose all paid reviews of products and services offered on their platforms that will help the consumers to make informed decisions.

Chirag Taneja, co-founder & CEO, GoKwik (an e-commerce enabler platform), feels that this is a welcome move from the government to ensure customer trust on e-commerce platforms. Such a policy will only hurt sellers of duplicate products, and authentic sellers and brands will welcome this move, he mentions.

Categories that heavily depend on reviews

While Indians shop for all kinds of things, from a matchbox to a refrigerator online, there are a few categories for which online shoppers heavily depend on customer reviews. Reviews of unbranded products that may not be heavily advertised, are crucial.

Taneja points out, “Customer reviews are an important feature across e-commerce platforms, except for standardised products such as F&B, grocery, etc. Fashion, home furnishing, beauty and personal care categories, which are discretionary or have high consideration criteria, depend more on customer reviews.”

Singh of Tilt Brand Solutions states that though the problem of consumer distrust may stem from paid reviews, but if the reasons why paid reviews are used in the first place are considered, it becomes clear that the solutions go way beyond marketing and involve the entire business.

“Brands need to start by looking at product design and manufacturing to improve quality. They will have to reconsider their pitch and set the right consumer expectations – specifically addressing over-claiming and under-delivering. It is vital that brands start to behave in a manner that builds, not just brand affinity, but also forgivability. Also, it will be important to build consumer engagement and response mechanisms that address genuine complaints,” explains Singh.

(With additional inputs from Aishwarya Ramesh)