Wednesday 11 January 2017

Flipkart’s WS Retail in the pink of financial health; Amazon launches city-specific selling platform
In December 2016, IOS reported how the revenue of Amazon’s largest seller Cloudtail surpassed Indian retail giants’ Shoppers Stop and Tata Trent’s revenue. While the Amazon seller might have won against offline retailers, it lost to its toughest rival – Flipkart’s WS Retail.

WS Retail clocked Rs 13,921 crore revenue in FY 2015-16

The home-grown ecommerce giant’s own seller WS Retail witnessed a 33% revenue increase at Rs 13,921 crore in the financial year 2015-2016. Flipkart’s largest seller’s income is nearly three times more than Cloudtail’s FY 2015-16 revenue of Rs 4,591 crore.
WS Retail’s regulatory filings report stated,
“The profit of the company has increased more than six times which is mainly the result of efforts of the management to increase the revenue and reduce the expenses incurred by the company.”
However, this financial report is of the pre-FDI period.  In late March 2016, the new ecommerce guidelines were announced that put a 25% sales cap from one vendor. As a result, Flipkart started reducing WS Retail’s share and introduced new vendors. Needless to say, the largest seller’s FY 2016-17 report card would be a little different in terms of revenue.
It would also affect Cloudtail’s numbers, which is anyway less than WS Retail.

Meanwhile, what’s Amazon up to?

Amazon lost a point to Flipkart in Cloudtail VS WS Retail race. But the Jeff Bezos’ company has various tricks up its sleeves.
Amazon India swears by the localization strategy to win the Indian ecommerce war against Flipkart and other players. Be it localized ads or payment solution, the American etailer is quite aware of the Indian consumers’ needs and wants.
The online marketplace’s latest offering is a city-specific digital platform for small vendors.
The program has been launched in Bengaluru, which would allow home-based businesses and small merchants to register on the platform via smartphones. Sellers from the fashion jewellery and ethnic-apparel category would get an opportunity to reach out to local buyers within their city through this new initiative by Amazon. Home décor and other categories will also be added in the future. Individuals can also buy and sell pre-owned goods.
Mahendra Nerurkar, General Manager and Director, at revealed,
“We have opened up the programme for individual sellers as well as home entrepreneurs in the fashion accessories and ethnic apparel categories. We have seen 600 sellers and home entrepreneurs registered with us over the period of one-and-half months.”

Some features of this Amazon program:

  • Smalls sellers looking to increase inter-city sales get access to Amazon’s huge platform
  • Fixed fee structure, that starts at Rs 10 as commission for orders below Rs 1,000
  • Amazon India’s logistics network handles order fulfilment, right from picking and packing the product
  • Products are delivered within 3-5 days
  • Payments are released quickly and payment methods are similar to Amazon India that includes COD and Amazon Pay

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