Probably for the first time anywhere in the world, Union of e-Sellers have revolted against an ecommerce portal; and this history has been created right inside India.
eSeller Suraksha, a union of around 1000 members along with All India Online Vendors Association, forum of approximately 800 members have declared strike against Flipkart. And their way of protesting is very simple: Whenever a user lands up at any product listed by these sellers, then ‘Out of Stock’ notification would greet them.
This means that Flipkart’s overall sales volume is bound to decrease, incurring them further loss. Due to this unique strike, speculations are rife that product prices may increase by 20-25% in coming days. Flipkart has around 90,000 sellers on their platform.
Last week, we had reported that due to change in Flipkart’s policies such as higher return fees and higher commission on product listings, these two unions have revolted, and can strike against them.
It seems that the revolt was indeed real.
Sanjay Thakur, president of eSeller Suraksha, said, “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 million SKUs (stock keeping units)
Flipkart, which has increased sellers’ commission (charged by them for product listing) by 10-40% and have shifted the return expense to the sellers has reportedly stated that this strike won’t make a dent as only a handful of sellers are participating in the strike. Although no official statement has come out yet.
As per Yahoo Finance, not all sellers are actually unhappy over Flipkart’s recent policy changes, and consider them at-par with standard market practices. One such seller of fashion and lifestyle segment on Flipkart, Aditya Agarwal, said, “Although the return shipment charges would push up the cost by about 3-4%, it is a standard practice across marketplaces. Flipkart initially was taking the burn on itself but now has started passing back some cost to the seller. And as the industry matures, we should expect more such changes.”
Flipkart’s Loss Is Amazon’s Gain?
Meanwhile, as we reported earlier, at a time when Flipkart is increasing commission to be charged from sellers, it’s arch rival Amazon India has decided to decrease commission in order to lure vendors.
Once talks of such revolt and strike started coming in, Amazon India announced (quite opportunistically) decrease of sellers’ commission from 5% to 3.5% for hottest selling category mobiles and tablets, from 4% to 3% for laptops, from 8% to 5% for non-education software products and from 12% to 5% for educational products.
Nielsen’s report already states that Amazon India is more preferred by sellers compared to Flipkart and Snapdeal. And besides, a massive $5 billion budget to expand their online presence in India is boosting Amazon’s reputation and power within Indian ecommerce niche.
While Flipkart is getting scolded by IIMs, and have lost their ‘Day 1’ slot during campus hiring; Amazon is building trust and confidence of sellers, besides snatching exclusive deals like Moto G4 and One Plus 3.
The ball is in Flipkart’s court now, and everyone is waiting for their next move.
