The Indian online market is led by two companies; homegrown Flipkart, and Global retailer Amazon. Both the companies have been fighting to get the max pie out of the available online shoppers in India. In order to lure the online shoppers, and make them their ‘loyal’ patrons, the companies got into a ‘price war’, offering merchandise at discounted prices.
The discounts even shoot up to 90% during festival seasons. The discounting has been increased the recent past, with a fight between the online retail giants intensified.
In its latest move, to Flipkart has sent a note to third-party merchants, who sell on its platform to bear 60% of the discounts that offer on the site. ‘In its note to the third-party merchants, Flipkart asked to share the discounts in a 60-40 manner. Which means, the merchant will offer 60% of the discount offered, with Flipkart to offer the rest 40% of the discount’, said a third-party merchant.
According to close sources, this is in an effort for cost rationalization of products sold by third-party merchants.