For close to a decade now, India’s e-commerce space has been the stage for an intricate dance—one meant to sidestep government regulations regarding how the sector functions. It’s an endless, breathless performance. And the more the government tries to plug the loopholes that the industry’s incumbents find and exploit, the more choreographed the dance becomes.
The latest example of this deft manoeuvering came scarcely a month ago. Reports surfaced that Flipkart India Pvt Ltd—the wholesale arm of e-commerce giant Flipkart—was beginning a massive revamp. The business, which serves as a supplier to Flipkart’s preferred sellers, would be winding down its sales.
Flipkart's new plan
Flipkart’s winding path back on the straight and narrow
Ahead of a $10 billion IPO, Flipkart’s changing how it does business. Its wholesale arm—which earned over Rs 31,000 crore in FY20—is planning to no longer sell to vendors on its platform. Instead, it will merely connect them to brands. Industry insiders, though, aren’t convinced much will change, while brands are uncomfortable with the new arrangement
With fresh regulations looming large and an IPO on the horizon, Flipkart is quietly changing the way it does business
The traditional revenue sources- commissions and margins- are at risk of being curtailed
Hence, Flipkart is planning to transform itself into a consultant or service provider to both brands and sellers
But the transition won't be easy as brands have apprehensions about Flipkart's new model