Executives at Amazon and Walmart-owned Flipkart are reportedly looking at ways to clear the stockpile.
The new foreign direct investment (FDI) policy could make it difficult for Amazon India and Flipkart to sell inventories worth Rs 2,000-2,500 crore each, according to a report in The Times of India.
The Department of Industrial Policy and Promotion (DIPP) had earlier this week announced changes to FDI policy for the e-commerce space, effective February 1.
The change in policy will prevent e-commerce from selling their own products on their marketplace, and potentially stop massive discounts and cashbacks.
E-commerce companies buy their inventory of clothes, accessories and other soft lines of products about three months in advance, the report said.
A rough calculation suggests that the two e-commerce players have each bought inventories worth Rs 2,000-2,500 crore, a source told the newspaper.
Moneycontrol could not independently verify the story.
Executives at Amazon and Walmart-owned Flipkart are looking at ways to clear the stockpile, the report said.
A number of sellers, including Cloudtail and RetailNet, are looking to discuss the situation with the companies.
“This is a big problem as they weren’t expecting a shock,” a source told The Times of India.
Deals with fashion brands typically involves supply of stock for three months."We don't sell to these platforms unless they promise us a three-month stock purchase. They have monthly targets and we provide a certain rate based on the promise of that high volume," an executive at a fashion brand told the newspaper.The Great Diwali Discount!
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