“Sellers body AIOVA blames Flipkart for holding merchants’ payments”
“Amazon, Walmart practicing anti-competitive business model in India: AIOVA to PMO”
“Online vendors body AIOVA again raises demand for e-commerce regulatory body”
“Seller body AIOVA approaches CCI against Flipkart’s predatory pricing”
And so on read multiple headlines in the past year, leaving no scope of doubt that sellers on e-commerce platforms like Flipkart and Amazon were particularly unhappy by the treatment they received.
After a point, when cons like complex registration, unfair return policy, lack of proper sales, high logistics expense, preferment of private labels, penalising policies, started outweighing the opportunity, several sellers delisted from the platform and the majority of them went dormant.
This, of course, became a pain for the expense and loss metrics of Flipkart business because of the depletion in the supply chain and increment in logistics costs. Not just that, regional utilisation (RU) went down and selection coverage (variety) also reduced on the platform.
Hit with the repercussion of its seller treatment, factoring in the upcoming Big Billion Days sales festival, Reliance Industries’ impending launch into e-commerce turf, and Amazon’s consistent corrective measures to solve this very problem to capture the larger market, Flipkart decided to start the process of repairing seller relations.
To pull back that 70-80% of inactive sellers, the first step Flipkart took was to conduct a survey to assess the problems sellers have against actively operating on the platform. With this data, the Walmart owned company will take up corrective measures such as seller training and policy amendments to better suit the needs of these sellers, reports ET.
All to relist sellers on its platform, increase selection coverage (an aspect in which Amazon enjoys advantage over Flipkart), and to minimize supply chain costs. However, one has to note that seller training and minor policy changes are not going to be enough increase the 45% mark of seller participation from smaller cities and overall seller numbers in general.
Solid policy changes have to be made, changes that might stand to cost the company in other ways.
Again, an important aspect that startups tend to forget – the rule of value creation. If the value isn’t created for sellers, manufacturers, suppliers, or any stakeholder for that matter, long-standing relations cannot be established – the kind that eventually results in profitability via stability and scale.
The one thing there is about this value creation is that it needs investment, significant investment, on the company’s part. A step that is important for Flipkart to take in the process of regaining its sellers.
