After Sellers and Customers Flipkart to Face Heat from the Government and Consumer Electronics Brands

Bansals_flipkart_1915138fBig Billion Day seems to have extended to a Big Billion Week for Flipkart. Company’s attempt to make the people happy seems to have not gone down well with many. We are not talking about the competitors, who might be worrying about the sale the company made in a single day, but about the sellers, consumers, offline retailers and big consumer goods manufacturers.

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Government Says it Look into Traders’ Complaints on Flipkart Sale

As per a report by Financial Express, after receiving “many complaints” from traders on Flipkart’s Big Billion Day sale, Commerce and Industry Minister Nirmala Sitharaman told reporters the Government will look into the concerns and take a call on whether more clarity is required on e-commerce retail business.

Now there are many complaints. We will study the matter… Whether there is a need for a separate policy or some kind of clarification is needed, we will make it clear soon,” Sitharaman said.

The heavy discounting, is making small and big traders worry that such strategies would badly affect players in the offline retail market . Also, Kishore Biyani, Founder, Future Group spoke against such campaignsHow can someone sell products below its manufacturing price? This is legally not allowed in the country. Someone can do such undercutting only to destroy competition. Just because they have foreign funding, they can’t kill local trade like that,”

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Consumer Goods Manufacturers Might take Legal Action against Flippy

Also, in a recent update by The Times of India, big consumer electronic brands like LG, Samsung, Sony and their likes, are moving away from Flipkart, and are considering to take a legal action against the ‘predatory pricing’.

“This is a clear case of predatory pricing just to shoot up traffic at their website, and build up valuations unrealistically. This is not acceptable and we will ensure that this does not happen again,” a top functionary at one of the big companies told TOI.

This means that these major electronics brands might not been seen on Flipkart anymore.

But why just Flipkart and why now? This wasn’t the first time an e-commerce company offered discounts. Samsung recently announced to take 48 of its models off e-commerce stores because of the pressure it faced from the offline dealers, but this did not target only one company.

  • Sudip Bhattacharya

    The whole story and the aftermath confirms what we already know – the market would rule the roost and not the buyers ‘only’, the supposed ‘king’, or the traders/e-commerce platforms ‘only’ but the combination of both. This experiment of Flipkart would pay them well in the future, because the marketplace wont allow them to repeat the cannibalizing their funds in future and they cannot afford to make a mess with the buyers in future because buyers wont allow them. But the effort from Flipkart has certainly brought it in the imagination of millions – both who bought and ones who ‘watched’.

    We can foresee a lot of readjustment on the price front in the near future and the e-commerce players will have to come in to some workable relationships with the brick and mortar shops. This is because it is an oligopoly in the e-commerce domain now.

    The dawn is breaking into the day …