Sellers irked with Flipkart's return policy; advantage Amazon?

India's biggest home-grown online market players Flipkart and Snapdeal are already facing stiff competition from the US e-commerce giant Amazon. And if one goes by recent news reports the inevitable entry of China's online powerhouse Alibaba sooner or later here will certainly put further pressure on the incumbents.

Over the years, these players have added close to lakhs of online vendors to boost their product categories in order to deliver goods quickly to the customers.

 Sellers irked with Flipkarts return policy; advantage Amazon?

But often there have been reports which suggest the growing tiff between these online sellers and the e-commerce companies over frequent policy flip-flops by the latter.

Domestic online marketplace player Flipkart is facing a similar situation after several of its online merchants threatened to exit or become inactive after the company put conditions on them, says the Economic Times report.

It is not the the higher commissions charged by Flipkart that is bothering the sellers. They are irked by the unilateral changes made in Flipkart's return policy, which would increase their cost of doing business.

Flipkart recently decided, among other measures, to increase the sales commission it levies on merchants, by up to 5 percent in some categories, as well as charge them a shipping fee, a reverse shipping fee, and a collection fee on every product returned by customers, effective June 20, the ET report said.

This may be giving rival Amazon a chance to attract more sellers on to its platform. Already the US giant is the most preferred e-commerce websites among sellers followed by Flipkart and Snapdeal, according to a Nielsen study.

While Amazon had the highest top of the mind recall (25 percent), Flipkart stood second (21 percent) and Snapdeal (20 percent), it added.

Although, Amazon, too, has recently undertaken increase in commissions, the company has clarified that it does not charge its sellers for handling product returns.

"To ensure the equilibrium of demand and supply, it is essential for e-commerce portals to focus on developing an inviting platform for online sellers in the country. Sellers are also increasingly discerning when it comes to reaching their customer and meeting business needs," said Dolly Jha, executive director of Nielsen India, in her report.

The US company was also ahead of its Indian competitors in terms of overall awareness about local e-commerce brands.

Amazon, which launched its India arm in 2015, is projected to see revenues of $120 billion by 2020 from $30 billion at the end of fiscal 2016. Also, the company recently made an announcement to invest another $3 billion in India to strengthen its position further.

With PTI inputs

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Updated Date: Jun 15, 2016 13:09:10 IST