Flipkart has been fighting battles on all fronts this year – IITs, state governments, delivery boys and now sellers on the portal. eSeller Suraksha and All India Online Vendors Association, two forums of approximately 1000 and 800 members respectively, have finally declared strike against Flipkart.
Last week, Flipkart faced threats from them over its revised return policy, to either exit or be inactive on the online marketplace. The cause of this agitation is shifting of onus of return expenses to sellers, thereby increasing their cost of doing business. Earlier it was less than 1% of the order value only if sellers were at fault.
As said by Sanjay Thakur, president of eSeller Suraksha, yesterday, “With Flipkart increasing the commission rates, we estimate that the selling prices of the product will have to be increased by 20-25% to make sure we’re not at a loss. Many sellers are not happy with the recent changes and close to 1,000 sellers participated in today’s strike and have displayed out-of-stock for about 1 Mn SKUs (stock keeping units).”
However, Flipkart presented a different story.
As said by one of the source, the numbers revolving around are fake and only 5-6 sellers from apparel category have actually taken out their products.
As of today, while checking Flipkart’s website, we tried to calculate the actual number of out-of-stock options in various categories. After calculating across 3-4 major apparel sub-categories like leggings, kurtis, etc., no exceptional out-of-stock options were found. Even on adding all results, it reached around a lakh but one million was definitely not the case.
As per a Flipkart spokesperson, “There has been no overall impact on the website and the number of active listings from our sellers as well as number of units sold has increased this week. We have received a positive response to our new policy from an overwhelming majority of our 90,000 sellers. We are confident that the new policy will not only help sellers to boost their business but also empower them to improve on quality and grow a loyal base of customers in the long run. We are working closely with our sellers to ensure a smooth transition.”
Also, it has been revealed that All India Online Vendors Association members are now backing off from this online dharna.
The increase in commission is said to be in line with industry standards to make Flipkart commissions at par with other players in this space. For instance, Snapdeal increased its commission in March this year (without any tantrums). Soon after, Amazon also brought changes in its commission structure.
Although, the unhappy sellers mark a tiny frame of Flipkart’s 90,000 merchant network, this menace has opened gates for the competitors. Amazon, with a seller base of 85000 in India, has already announced a decrease in sellers’s commission to lure them to its platform. Snapdeal, on the other hand, is already working with a brigade of more than 3 lakh sellers, and has recently decreased commission for selected sellers.
The Amazon-Snapdeal-Flipkart combat is going fierce day by day, with its heat now reaching the sellers. With Amazon sitting high on the pile with $3 Bn funds, at the same time gaining sellers trust and confidence, the game seems to be shifted to it. However, in terms of GMV, Flipkart is still preferred more by consumers; dominating with 45% market share, followed by Snapdeal with 26% and Amazon with 12%.