Two of India's dominant e-commerce companies- Amazon & Walmart-owned Flipkart have slashed the commissions they earn from sellers on their platform, amidst rising competition in the space, people familiar with the development told Moneycontrol.
While the commissions vary from one category to another, Amazon and Flipkart typically can charge anywhere from 12-35% from sellers for different items.
"Even if I was selling a product for Rs 249, I was easily able to pocket Rs 200. The same product we use to sell for Rs 400 on other websites," said a seller requesting anonymity.
"It (Meesho) has some issues -- slight delay in payments or reconciliations but the zero commission model has been a huge benefit for small sellers like us," he added.
The commissions have been strategically reduced by Amazon and Flipkart only across low ticket products which comprises unbranded items. Meesho heavily focuses on this specific non branded, value for money product categories.
According to experts categories like apparel and home are the first few that a customer indulges into before getting completely comfortable with the online commerce platforms. It is therefore all the more important for the market leaders to be aggressive in this domain.
"These are the categories which brings new buyers to the platforms. A new buyer starts purchasing fashion or these kinds of things and once he is confident he increases his spending or buys more categories," said Sateesh Meena, independent e-commerce analyst.
Last month Moneycontrol reported that Flipkart had set up a war room to keep an eye on six year old Meesho, following its rapid expansion and execution.
In an interview with Moneycontrol, earlier this month, Meeho's founder and chief executive officer Vidit Aatrey said that Meesho had a "very strong" relationship with third party logistic firms because of which he was not perturbed by the competitors' strategies.
"People will try to do whatever they want to do to hurt our growth. To some extent, a lot of people are threatened by our growth, which is quite expected," he said.
https://www.moneycontrol.com/news/business/flipkart-vs-meesho-a-new-war-in-indian-e-commerce-7763631.html
"In order to enable growth and success of lakhs of small businesses, we endeavor to keep fees on Amazon competitive for sellers. All our decisions are driven by what’s right for sellers and our customers," an Amazon India spokesperson told Moneycontrol without getting into the details of the change in the commission rates.
Flipkart did not respond to the queries for this story.
According to industry sources Flipkart and Amazon register around 2.5 million orders on a daily basis while Meesho clocks 2 million. However Aatrey in the interview claimed that Meesho was averaging 3 million orders per day.
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