No Online Discount This Dussehra/Diwali? Flipkart, Amazon Can Be Forced To End Price War!
Indian Govt. wants to protect small traders against large online shopping portals.
Now, this is some bad news for the online shoppers in India. More bad news, if you were planning on a shopping splurge this festive season.
As per reports coming in, India’s largest ecommerce portals: Amazon and Flipkart can be forced to end price war.
And this means no discount on your online shopping this Dussehra and Diwali!
Keep reading to find out the truth.
Cloudtail and WS Retail from Amazon India, Flipkart Can Be Banned
FactorDaily has reported that Indian Govt. is considering a new clause in the National Ecommerce Policy, which can force Cloudtail and WS Retail to exit Amazon and Flipkart respectively.
In case these two sellers exit, then discount on online shopping will be a thing of past.
Cloudtail is Amazon’s own seller, responsible for a large proportion of products sold on the portal, meanwhile WS Retail is Flipkart’s own seller, having the same rights.
While Cloudtail is a 49:51 venture between Amazon Asia and N R Narayana Murthy’s venture capital company, Catamaran Ventures; WS Retail was initially part of Flipkart, but now made a separate company.
As of now, FDI rules on marketplaces state that a single seller cannot have more than 25% share of the overall products sold. Both Cloudtail and WS Retail have been circumventing this rule by creating separate entities for their biggest sellers.
But now, the bluff will be finally stopped.
A senior Govt. official said, “If subsidiary sellers continue to sell on their parent e-commerce sites, it will be difficult to stop deep discounting. It is easier to flout rules if these sellers are allowed to sell on the platforms.”
As per the reports, Govt. is considering this possibility and talks are already on.
We had earlier reported that WS Retail can entirely stop selling on Flipkart; but once the new Ecommerce Policy with amended laws come into force, they will be left no choice for WS Retail.
What Does This Mean For E-commerce Market?
Discounts and festive offers are one of the most important criteria for selling products online.
We have already reported how 2 crore Indians are expected to shop products worth Rs 21,000 crore during the festive days of October. The market is already abuzz with anticipation of some interesting deals and offers next month.
Now, WS Retail and Cloudtail, which are ‘anchor sellers’ on Flipkart and Amazon respectively are able to offer massive deals and discounts, as they are sourced by the e-commerce giants themselves, and can afford to sell products at cheaper price to build a customer base.
In case they are banned to sell, the era of discounts can be over.
We will keep you updated, as we receive more updates.
Related:
Anti-Competition Case To Be Filed Against Flipkart; CAIT Says FDI Rules Violated By Walmart!
