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E-retailers not too worried about online scams

Recent police reports in Singapore showed that there has been an increase in online fraud with new statistics indicating the fraud cases in e-commerce grew 425% in the first half of this year as compared to the last.

This comes as the e-commerce market in Asia Pacific is on track to become one of the largest in the world by the end of 2014 with online sales expected to hit more than US$1 trillion by 2020, according to eMarketer.

An article on The Business Times last week said that multiple payment online purchase scams have spiked from 13 in the first half of last year to 302 this year.

Meanwhile, just earlier this month, a police investigation was launched for an online scam where several scammers posed as online payment facilitator PayPal. At least 27 cases were being investigated, amounting up to a loss of SG$33,000.

As the marketing industry throws its focus on e-commerce, going ahead, these scams beg the question if online retailers will take a hit.

However, e-tailers say they are unperturbed by it. Roger Yuen, founder and CEO of Clozette said that while online scams have been around for a long time, it’s just getting more pervasive and noticed of late. However, he added that this should not be much of a worry for shoppers and e-retailers.

“For shoppers, if something is too good to be true, it probably is. I would argue that the number of scams versus the huge amount of online transactions is still very small. Having said that e-commerce businesses have to be vigilant in selecting the merchants that they work with, but I don’t see such scams affecting our business,” said Yuen.

Yuen added that users simply need to be educated and be diligent when buying on the internet.

Meanwhile, Tito Costa, Zalora’s regional managing director added that type of scams rarely affect business strategies. However, they do highlight the importance of choosing reputable sites when shopping online.  A general rule of thumb for shoppers when paying on any e-commerce site is that they should never fall for emails from “merchants” that ask for payment information or promise “deals” or “sure-win offers”.

“No reputable e-commerce merchant will ask for payment information via an email or a newsletter,” Costa added. Meanwhile, those in the e-commerce business also need to set a clear and transparent customer service policy to a ensure genuine brand image and built rapport with consumers.

For Zalora, this includes its 30-day, no questions asked, free return policy amongst multiple payment options which it believes contributes to building overall confidence in online retail among consumers.

Meanwhile firms such as Lazada have also upped their game. For Lazada, it claims to be constantly upgrading the IT systems to ensure that security measures are in place. Lazada also has a dedicated team and a chief data protection officer to oversee the IT system.

Martell Hardenberg, co-founder and managing director, Lazada.sg said that regular security audits are a must for the company to ensure that systems are operating efficiently and consumers private data are not compromised.

“E-commerce business should not only comply with basic security protocols but should step up encryption measures that would reinforce users data protection. Nonetheless, consumers also need to exercise extra vigilance when using the internet,” he added.

“Our online payment is secured by Norton, the global leader in online security for e-commerce payments and we work very closely with leading payment organisations such as Visa, Mastercard and Paypal across Southeast Asia. Being able to guarantee information security and data protection to our customers remain fundamental to our business,” Hardenberg added.

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