One of the largest sellers and major revenue contributor for Flipkart, WS Retail has stopped selling its product on the Bengaluru-based online marketplace platform.
The closure has come at a time when Flipkart is dealing with the wraths of sellers and traders bodies such as AIOVA, CAIT and legal tussle with individual brands (Skechers) and sellers (Macrowagon Retail).
Citing sources, a TOI report said that Flipkart had reduced its dependency on WS Retail and shifted a large chunk of its sales to other vendors. This could be a reason for pull off from the marketplace.
Following the government regulation that barred any particular seller on an online marketplace from contributing more than 25 per cent volume, Flipkart was scaling down WS Retail.
During Flipkart’s early days, WS Retail was created to sell products exclusively on its platform. It used to contribute over 40 per cent of Flipkart’s volume before regulation came into effect.
While WS Retail could have continued contributed 25 per cent of Flipkart’s overall volume, it’s not clear why it had pulled the plug completely.
Over the years, many sellers on Flipkart alleged favouritism towards WS Retail, the sources added.
Founded by Flipkart founders Sachin Bansal and Binny Bansal in 2009, W S Retail witnessed a sharp fall in revenue and the seller also incurred a loss after the government’s cap.
While WS Retail’s revenue recorded a fall of 66 per cent to Rs 4,628.1 crore in FY17, compared to Rs 13,921.2 crore in FY16, it registered a net loss of Rs 24.3 crore for FY17, in contrast to the profit of Rs 5.2 crore in FY16.
On contrary, Amazon’s selling arm Cloudtail had reduced losses to zero and recorded marginal profit in FY17 against a net loss (before tax) of Rs 30.25 crore in the preceding fiscal, reveals regulatory filings.