Most merchants don't mind new 'fee' at Flipkart

BENGALURU: Flipkart says it has recruited about 3,000 merchants to its online marketplace since announcing a new policy some weeks ago that would add to their costs, compensating for this with other favourable measures.

Flipkart has increased the commissions that merchants have to pay for selling on its platform by 5-6% in some key categories, resulting in some disgruntlement. It has also asked sellers to bear the cost of handling products returned by customers.

But the company is also offering a 50% discount on the commission fee for sellers using its warehousing services; enabling them to source cheaper products from China and within India; providing assistance with payments and logistics; and is set to license its in-house brands to select vendors. Having an army of online merchants is crucial for Flipkart as well as rivals including Amazon India as they rapidly add a vast and diverse range of product categories and need trained sellers to ensure supplies and quality.

“We have been seeing an uptick in onboarding new sellers over the last few weeks,” said Anil Goteti, head of marketplace at Flipkart. “The last figure we shared (earlier this month) was 90,000 sellers and it’s now 93,000. This is across categories.”

Flipkart sells products in about 80 categories, the biggest being electronics, apparel and large appliances.


Goteti said a virtual protest by a small group of sellers on June 20, the day the policy changes came into effect, was ineffective. Four-six sellers delisted their products for about 30 minutes and brought them back online, he said.

“From a seller perspective, the cost of doing business is going up. But we are working with (sellers) to improve their portfolio. There are a few sellers who are going to be impacted a lot and are unhappy. We are communicating with them,” Goteti said.

Flipkart is also helping sellers adjust to the changes through training, webinars, and visits by key account managers, he said. Earlier in June, Amazon India also introduced some changes to its seller policy, but in the opposite direction by lowering commissions in several categories.

“Many sellers who were actively selling on Flipkart have now begun focusing on other platforms where commission fees are lower and policies friendlier,” said San jay Thakur, spokesperson for ESellerSuraksha, an association representing about 1,000 online merchants, some of whom had threatened the virtual protest against Flipkart’s new policies.

Flipkart has been acquiring merchants at a rapid pace with several initiatives. In March 2015, Flipkart had 30,000 sellers, which rose to 50,000 by October and 90,000 in May this year.

Among Flipkart’s competitors, Snapdeal and Amazon India say they have about one-lakh sellers on their platforms, while Paytm says it has 1.2-lakh sellers. None of them have disclosed the number of active sellers on their platforms.

According to industry estimates, the top 20% of the sellers on any of these platforms account for more than 85% of their sales.