Flipkart, GOQii settle dispute over sharp discounting
Walmart unitFlipkarthas settled a legal dispute with Vishal Gondal'sGOQiithat had previously alleged it suffered losses because its products were sharply discounted on the global retailer's website.
GOQii, a seller of smartwatch-type health devices,sued Flipkart last monthin a Mumbai court, alleging its devices were discounted by around 70% to the retail price, much more than the two sides had agreed. The court had, as an interim measure, ordered device sales to be halted on Flipkart.
In a joint statement on Friday, the companies said the dispute had been resolved and GOQii health devices would again be available on Flipkart. They didn't say how the settlement was reached.
Vishal Gondal, CEO of GOQii, told Reuters the company would withdraw the case against Flipkart. Thee-commerceretailer's "team worked on a resolution benefitting the brand and the customers", Gondal said in the statement.
The legal spat wasseen as a test caseof the giant retailer's operating strategy in the country.
Small traders and a right-wing group close to Prime Minister Narendra Modi's ruling party have raised concerns about large e-commerce companies, saying they burn billions of dollars deeply discounting some products to lure customers onto their sites, in the expectation that they will also buy other goods.
GOQii said it signed an agreement last year with a Flipkart unit to sell two of its devices at a price not below Rs 1,999 and Rs 1,499. It later found the devices were being sold for Rs 999 and Rs 699, calling it "unauthorized" discounting.
In response, Flipkarthad saidit reserved "the right to institute actions for defamation, both civil and criminal", arguing it wasn't responsible for any discounts which are determined by third-party firms which sell via its website.
The two companies struck a friendlier tone in their joint-statement on Friday as they brought the legal battle to an end.
"We have ensured constant engagement with GOQii to resolve any differences," Flipkart said in the statement.
@Flipkart is a customer-focused marketplace that works closely with brands & seller partners to ensure that all policies are aligned to industry standards & are in compliance with all applicable Indian laws. We’ve a zero-tolerance policy on incidents that impact customer trust... pic.twitter.com/nrYJeUh2Mv
With a 19% market share, GOQii was the second-biggest player in India's so-called wearables market last year, data from industry tracker IDC showed. The market is dominated by China's Xiaomi, with Samsung a small player.