Misleading Product Advertisements In India : Just Fleecing Consumers

Most of the product advertisements in India are misleading and is targeted to trap consumers. By the very definition, the product advertising is a paid promotional communication that attempts to induce consumers to purchase a product. Communication channels utilized for product advertising include television, radio, print media, websites, social media, and billboards.

As a consumer have you ever thought how misleading are most of the ads and how these are burning a hole in your pocket. For example, most of the RO water purifier don't reveal that its filter system has to be replaced periodically and it costs as heavily as Rs. 4000 per year. I learnt this hard lesson after installing Kent RO water purifier. "Dream Girl" and actress-turned politician Mathura BJP MP. Hema Malini is the brand ambassador for this product. The purifier costs more than Rs. 16,000 and annual replacement of filter and other installation is Rs. 4,000. By this cost, you will have to shell out Rs. 20,000 in five years for running this filter. Its, indeed, very high. Had I known this earlier, I would have never installed this RO. Earlier, the Hindustan Lever non-RO water purifier was costing some Rs. 1000 annually for replacement of filters. This is just one example. Almost all branded products are indulging in misleading ads.

Worst, Yoga guru Ramdev, the iconic figure is in the forefront and his Patanjali is often in the news for violating advertisement code. Between 2015- 2017, the Advertising Standards Council of India (ASCI) found more than 500 instances of advertisements in electronic media that were making misleading, false, and unsubstantiated claims. ASCI also found that 25 out of 33 advertisements of Patanjali Ayurved violated the ASCI code.

The watchdog had rapped Patanjali Ayurved for “false and misleading" claims in its various advertisements, including for its hair oil and washing powder brands. The watchdog has ruled that the advertisements of the group associated with Yoga Guru Ramdev “unfairly denigrates" other products in the market.

The Consumer Complaints Council (CCC) of ASCI has also upheld complaints against advertisements by Johnson & Johnson, Amazon and ITC, among other companies. In March, 2016 alone, the CCC received 156 complaints, out of which it upheld as many as 90 complaints, terming them as “false and misleading". The upheld complaints included 32 in the education category, 30 in the healthcare and personal care category, and further 10 in the food and beverages category.

Section 2 (1) (r) of the existing Consumer Protection Act 1986 clearly states that the practice of making any statement, whether orally or in writing or by visible representation which falsely represents that the goods are of a particular standard, quality, quantity, grade, composition style or model; falsely represents that the services are of a particular standard, quality or grade, falls under unfair trade practices.

Remember how Patanjali's 'Coronail kit' sparked massive debate over its efficacy to prevent coronavirus last year. Despite the AYUSH ministry approving the Patanjali's Coronil for the treatment of coronavirus, the World Health Organisation disapproved it. It was a clear case of favoritism. Thereafter we didn't hear anything about this kit.

Despite all this the Indian advertising industry is the second fastest growing advertising market in Asia . It is estimated that the share of ad spend in India’s Gross Domestic Product (GDP) is around 0.55 per cent.

The Indian advertising industry has grown to the size of 75,952 crore by the end of 2020. It is seen to grow at 11.83% CAGR to reach a market size of Rs 133,921 crore by 2025.

Print media contributes a significant portion to the total advertising revenue, accounting for almost 41.2 per cent, whereas TV contributes 38.2 per cent, and digital contributes 11 per cent of the total revenue. Outdoor, Radio and Cinema make up the balance 10 per cent.

In a free-market economy selling cost constitutes the heaviest part to the total cost. The selling expense-to-sales ratio is between 25 percent and 30 percent of net sales. For a business-to-business cataloger, this critical ratio ranges from 15 percent to 20 percent of net sales.

That's why Chinese products are cheaper than Indian as selling cost of Chinese products are much less despite higher wages there.

Now the question is how to protect yourselves from false product advertisements. Though consumers can sue for damages to recover money they paid for a falsely advertised product and court can issue a cease and desist order, requiring a company to stop distributing a false or deceptive advertisement, but its a cumbersome process. Companies are better placed in this matter with rich resources. Here a consumer is at the receiving end. All that is needed is awareness.

(Chander Sharma)