How Ecommerce Companies Are Faking Real Estate GMV

In the race for GMV, some of the ecommerce companies are going an extra mile to drive numbers. Here is how it is working:

Step 1 : Buyer and property dealer spend weeks/months on the deal. Finally they decide to sign the deal. Everything is done offline.fake_shark

Step 2 : Ecommerce company steps in, gets the property dealer/builder to sign up for their marketplace.
The property data is uploaded.

Step 3 : The ecommerce company lures the buyer to buy the same property from the website (i.e. transfer the booking amount).

Step 4 : The buyer sees no point/value in transacting online. The GMV hungry ecommerce company transfers ~20% of the signing/booking amount (either cash or vouchers) to the buyer.

The deal is done. Similar arrangement is made with the property dealer.

The buyer is happy because they get a ‘cashback’. The property dealer/builder is happy because they too get a good deal. Some of them are promised free advertising space as well.

Both of them actually do nothing on the ecommerce platform. But a GMV is recorded.

The ecommerce company is happy because they get to show BIG GMV numbers – that too for doing nothing (and in most cases, there is NO platform).
Yeah, the company does lose some money in the entire transaction – but hey! It’s all about growth!!

Welcome to #FakeEstate business.

12 comments

  • Unsubstantiated posts are tough to take seriously dude. Appreciate the intent, but there has to be more proof.

  • The essence of a Baniya Business is “If you can make money/pisa from cutomer its a business” what we see in ecommerce is not a business its a game to lure investors make money and go bust one day .

    What F/S and A are doing is different F/S are burning investors money while A is burning its own money and it knows why and how – they have a larger game plan – all school books can be converted to a kindle imagine your kid carrying single kindle and reducing weight of his bag bu 60% wow relief for parents…

    Am a sindhi and we can make money by selling a 100rs worth of goods at 98rs and mint lakhs too – This is what my grandfather did . He migrated from Pakistan with no business in sight and nothing to do . So he would purchase a 100Kg bag of sugar at 100rs . He would then transfer this to 10 bags of 10kg each and sell it at 9rs 80 paise or may be 9rs 90 paise to middle level business men – who couldnt afford 100kg bag but could manage to sell 10ks a day . Thus he created a network of 100s of sugar and kirana sellers and became the largest distributor to them . But was he loosing 1rs/2rs per 100 kg bag -no – the smaller bags that he got for 10kg stauff were approx 2-3 paise per bag and the larger bag that he sold costed 2 rs thus netting him 1rs 70 paise per bag from a plastic dealer . So the more he sold the more monety he made . 20 years and he became the largest sugar and pulses and plastic merchant , name kept secret in the mumbai area . But the point here is

    – He was profitable from his first transaction
    – He knew how to grow business – Sugar to Pulses – wholesale to retails
    – He knew how to extract the last penny
    – He then entered commodity trading , price leverages , negotiations etc.
    – he never sold on credit ???? Contracting view here – some love credit some dont
    – Analytics / Predictive Modelling he had it all build in his mind
    – Credit rating he had it all built in his mind
    – It took him 20 years to be the biggest but first transaction to make a profit

  • Another example

    Yepme sells their products on Fashionara.
    Fashionara has listed their entire catalogue on Paytm
    Paytm sells Yepme product to customer

    Who should add this transaction to their GMV?

    Yepme, Fashionara of Paytm

    I guess all three are counting the sales to their GMV

  • Not only these real estate companies most of the ecommerce companies are selling fake products.for eg: Askmebaazar.com which advertises Nokia phone and sends customers a cheap Intex phone but in the bill it will be Nokia,Most of the products sold on paytm are fake but the most dangerous are Whey proteins on which they have a substantial margins And if you buy Giftcards from paytm then you are going to repent cause its business partner GiftcardsIndia,Malad,Mumbai which sells the products is running a ponzi scheme.There are many other cases which I have been researching for some time which can open a pandoras box.I hope you will publish it.

  • Ha ha ha ! The game of playing on the gunny bag sounds awesome. But the real money spinner behind this was the slightly lower weight of the 10kg and 5 kg packs. so 10 gunny bags of 100 kg each should give 100 packs of 10 kg each but in reality you would get 102 or even upto 105 packs (depending on how greedy the trader was).

    Thats how they made money – don’t try to gloss over the greasier side of this trade.

  • The sales and GMV are certainly inflated.

    The way these e-commerce companies also consider the gross sales value (i.e. before discount) and not after discount.

    First increase the price and then give discount. The buyer is also happy and the e-commerce company gets to show a higher GMV as the discount is not reduced from GMV

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