Aug 31, 2014

The Great Xiaomi+Flipkart Scam

Flipkart.com – India’s top e-commerce portal made a history recently by announcing that they’ve managed to sell about 95,000 Xiaomi Mi3 phones through an exclusive deal with the Chinese manufacturer.

As per the deal, only Flipkart.com are allowed to sell the phones in India. Flipkart priced the phone at a super-attractive price of INR 13,999 only.

Flipkart.com and Xiaomi partnered together to create a lot of hype around the phone by claiming that the hardware specs of the phone match those of high end phones sold by other vendors like Sony, Samsung and HTC but priced more than twice of Mi3.

As per the figures shared with media, Flipkart have had 4 or 5 flash sales of the phone through their website. Each sale requires interested buyers to pre-register on Flipkart.com. When the sale starts, only pre-registered buyers get a chance to book a phone by clicking on the “Buy” button.

Typically every stock of phones (between 15,000 to 25,000 pieces) gets sold in a couple of seconds. I managed to buy a phone myself in a flash sale in which 20,000 phones were sold within an unbelievably short time of 2.4 seconds (i.e. 2400 milliseconds). No other product has ever managed to get this kind of traction in India.

However, very soon media started reporting that a significant number of buyers started experiencing all kinds of issues with their phones. The numerous problems that were reported by the media (see references below) include:

  1. Non-functional microphone during voice calls
  2. Defective SIM tray
  3. Defective main camera resulting in faulty pictures
  4. Loose micro-USB port affecting data transfers
  5. Overheating while using the phone
  6. Dysfunctional wall charger
  7. Cracked display
  8. Phone getting stuck in infinite boot loop
  9. Disappearing phone logs and contacts
  10. And potentially more issues

What’s more, as per media reports, affected people kept calling Flipkart support and tried to avail of Flipkart’s 30-day replacement guarantee, but Flipkart kept rejecting replacement requests on one pretext or another (see references below), further frustrating the already unhappy customers even more.

In my case, my phone stopped working after exactly 1 day of use. I experienced a non-functional microphone during voice calls. Which means that I was effectively blocked from using the phone. I did the following:

  1. Logged a replacement request with Flipkart
  2. Waited for 4+ days for Flipkart to verify my request
  3. When Flipkart made no effort to contact me, and took no action on my request,
    1. I made a call to Xiaomi customer support
    2. Tried various steps suggested by Xiaomi support, like
      1. Increased call volume to full, and
      2. Ran the hardware test on the microphone
    3. None of the above steps helped
    4. Xiaomi suggested that I bring my phone to their service center
  4. However, since Flipkart has a 30-day replacement policy, I wrote on Flipkart’s Facebook page requesting them to respond back to me.
  5. They got back to me on the same day and asked me to reset the phone to factory default. Also, they rejected my replacement request.
  6. I did as told by Flipkart, but it did not solve the issue. So I logged a fresh replacement request on Flipkart.com
  7. Again, I waited for 3 days for Flipkart to verify my request. They did nothing. No e-mail (except the auto-generated one), no calls, no confirmation – absolutely nothing.
  8. In-between I chatted with a customer service representative online, but he/she reassured me that I need not worry. Flipkart would solve the issue. I just needed to be patient.
  9. Finally, after 3+ days of waiting my patience gave up. It took about 7 or 8 tweets and a similar number of posts on their Facebook page to wake up Flipkart from their slumber.
  10. Wake up they did, by rejecting my replacement request yet again. Without any explanation. Without any confirmation. Without any action.
  11. Finally, I called up customer support and asked them exactly what was Flipkart up to. Instead of acknowledging the issue and refunding the money to potentially thousands of unhappy customers, they are hiding their face in sand like an ostrich.
  12. After this, I got a call back from Flipkart in which they agreed to replace my phone. I told them that I have absolutely zero confidence in the quality of the phone – since I’ve seen other Mi3 customers in my office face numerous issues with the phone, so I’d prefer a refund instead. However their customer representative told me that they are unwilling to refund the money and the best they can offer me is a replacement.
  13. “But what if the phone malfunctions again?” I asked. “No problem. File a new replacement request” – came their reply. Amazing. Just what a frustrated customer would have loved to hear.

From what I’ve seen at my co-workers who’ve bought the same phone, to the numerous online reports – suggests that what Flipkart+Xiaomi have done in India is nothing short of a big scam. A racket. Nobody knows how many out of the 95,000 phones they’ve sold are defective. In absence of any concrete figures shared by Flipkart+Xiaomi, I am inclined to believe that the number of defective phones could be anywhere between 10%—20% (i.e. approximately 10,000 to 15,000 defective phones).

What should Flipkart/Xiaomi do about this? I expect them to:

  1. Publicly acknowledge the issue. Being honest will help restore customer confidence in their website
  2. Publicly share the actual number of defective phones sold
  3. Immediately issue 100% refund + some compensation to all affected customers
  4. Recall all defective units and don’t resume sales again until the root cause is identified and rectified

Their current stand of refusing to admit the issue and not refunding money to affected customers amounts to nothing short of dishonesty/cheating.

References:

  1. Will defective units, poor service put the brakes on India's Xiaomi Mi 3 excitement?
  2. Xiaomi Mi3 Becomes a Nightmare for Customers, Horrible Flipkart Support, and Product Quality
  3. 1-star and 2-star reviews from certified buyers on Flipkart.com

Customer Complaints:

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