Flipkart Sellers Play It Safe, Plan To Cut Purchases Further From E-tailer’s Wholesale Unit

Top sellers on Flipkart are preparing themselves for any potential changes in foreign investment(FDI) rules in the future. According to a report, Flipkart’s prominent sellers like  SuperComNet, OmniTech Retail and RetailNet plan to slash direct purchases from Flipkart wholesale to about 10 percent or even less in the coming months.

Citing sources familiar with the development, the report said sellers are currently doing a balancing act to comply with the change in FDI rules announced in December by restricting purchases from Flipkart wholesale entity to about 25 percent and sourcing bulk of the products from companies manufacturing it.

In December, the government changed rules for foreign-owned e-commerce marketplaces and said a vendor shall be considered “controlled” by the marketplace operator if it sources more than 25 percent of its merchandise from any entity related to the e-commerce platform. The new rules, which came in force from February 1, allows FDI-funded marketplaces to lend their platforms for other businesses and sellers and bars such marketplaces from holding any of their inventories.

The sellers said they plan to cut down their direct purchases from Flipkart wholesale once a layer of intermediaries is created. These intermediaries will buy from Flipkart Wholesale and sell them to these preferred sellers.

“Right now, whatever they source from Flipkart will be under 25 percent cap and then they will stop sourcing from Flipkart wholesale once it hits the 25 percent threshold,” one person with direct knowledge of the development told. The share of purchases from Flipkart wholesale will eventually drop to less than 10 percent, they added.―Times Now

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