Flipkart incentivises sellers for giving additional discounts to loyal customers

To attract more buyers and keep loyal customers stick to its platform, home-grown e-commerce marketplace Flipkart has come out with a new incentive scheme for sellers.

Under the scheme, Flipkart is incentivising sellers for giving additional discounts to customers enrolled in its revamped loyalty programme SuperCoins (previously Flipkart Plus), which offers subscribers benefits such as free delivery, early access to sale events and rewards based on the frequency of transactions.

The e-comm firm, as per its letter to the merchant, rewards sellers through credit note.

“The incentive is a way of offering a concession on our fees and commissions for achieving all the parameters of the incentive programme,” said the letter quoted by ET.

The scheme is optional and vendors can choose to be part of it. Vendors, who choose to offer a 5% additional discount to consumers will receive as much as 50% of the discount value back as a non-cash credit note.

As per the company, vendors, to be eligible to receive rewards, need to restrict cancellation of total orders to 0.5% during the promotional period.

The development comes at a time when the govt, through FDI, had prohibited foreign-owned e-commerce marketplaces from directly or indirectly influencing the price of products sold on their platforms.

It also asked these marketplaces to curb predatory pricing on products after a long protest from small sellers.

The move has forced online marketplaces, who also claimed to have been witnessing a downfall in revenue owing to the policy, to find alternative ways to keep buyers hooked on their platform. Due to tighter e-comm rule, Flipkart has reportedly started to curtail buying products directly from the companies.

Before the enforcement of the policy in February, close to around 70-75% of the sales on the Indian e-comm marketplace were made by vendors who sourced the goods from the wholesale arm of the company and had access to deep discounts which helped them price products extremely low.

The e-comm firm reportedly found a loophole and introduced intermediaries to bypass the norms. They layered the business model by inducting B2B intermediaries who bought products from Flipkart’s wholesale department and sold the same products to the vendors selling the merchandise on the e-commerce marketplace.

In June, Commerce and Industries Minister Piyush Goyal had question Walmart-owned firm's corporate structuring. Goyal had emphasised that the govt will work to ensure small vendors keep growing.