As FDI rules kick in, Flipkart works closely with top sellers to beat Amazon
Flipkart is working more closely with its top sellers, as it looks to improve the customer experience to take on an increasingly aggressive Amazon.
"This programme targeted at the mega sellers will help Flipkart control the customer experience," said a source familiar with the development. "The management thinks that customer experience in a marketplace tends to get marginalised."
The move is also likely to help Flipkart reduce the share of sales from the main seller on its platform, WS Retail, which it claims has been dwindling. WS Retail was part-owned by Flipkart founders Sachin Bansal and Binny Bansal, emerging as a major seller on its platform. Subsequently, the Bansals sold their stakes in the latter to a group of Indian investors and resigned from its board in 2012.
As these mega sellers get bigger, it will also help Flipkart comply with recent guidelines that no single vendor can account for more than 25% of the sales on an online marketplace.
Flipkart confirmed the programme. "This programme which we started in October 2015 is aimed at encouraging high quality sellers who can serve our customers better," said a Flipkart spokesperson. "The programme will support existing and new sellers on product quality, customer service, packaging, logistics and supply chain."
The Bengaluru-based company has been looking get a tighter grip on delivery and fulfillment experience, starting with reducing the share of outsourced deliveries and doing more of them in house. The second step is working more closely with top sellers.
Flipkart's moves comes at a time when India's top online retailers including Snapdeal, Amazon and PayTM have been busy onboarding thousands of merchents on their platform.
Flipkart itself has increased the number of sellers on its platform from less than 10,000 at the start of 2015 to over 85,000 registered sellers right now. Rival Snapdeal recently said that it has doubled the number of sellers on its platform in the past one year to more than three lakh, and is on track to meet its target of five-lakh sellers by the end of 2016.
But even as the number of sellers on these platforms mushroom, most of the sales are being driven by top merchents and categories like smartphones, electronics and fashion. "At maximum 2000-3000 sellers control a majority of sales, 80-90% sales, on all these platforms," said one of the sources mentioned above, underlining the importance of working with top sellers.