Flipkart’s Big Shopping Days are back with big deals and discounts. Wait a minute! Flipkart’s having a sale? What about the FDI ruling? It says no heavy discounts!
How is Flipkart Offering Discounts?
According to the FDI ruling in March, online marketplaces are not allowed to influence product prices on their platform, either directly or indirectly. This means etailers like Flipkart are restricted from providing discounts. So how is the marketplace hosting a mega sale with sellers offering discounts ranging from 15% to 70% on various items?
Well they seem to have found a loophole. India’s top online marketplace, Flipkart, has changed its discounting strategy to suit the purpose of this 3 day mega sale. To make this strategy work, the marketplace has asked sellers and brands to lower their product prices and margin to provide rebates. So instead of Flipkart funding the discounts, its sellers and online brands that are cutting their profits.
Could this be why, Binny Bansal claims Flipkart is happy with the FDI ruling?
Flipkart is Still Complying with FDI Ruling
This move enables Flipkart to have sales and still comply with government regulations. Since Flipkart is not backing the discounts, it is not directly or even indirectly influencing pricing. As a result the playing field stays leveled for offline retailers too.
According to, Kamal Nandi, the business head of Godrej Appliances, “All prices during the Flipkart sales are mutually agreed.”
Many brands have passed on their inventory at a lower price to Flipkart sellers, but only for this 3 day sales period. They have also agreed to the etailer’s request to lower margins in order to bring down prices.
A top executive at a consumer electronics brand said, “The notification does not stop the brands from offering discounts.”
“The prices and discounts for all our sales, including Big Shopping Days, are decided by the participating sellers and brands. Our focus is to offer quality products at great value,” said a company spokesperson.
The Result of Changing its Discount Strategy
The discounts are mostly available on products exclusively sold online. They aren’t available on big brands like Samsung and Apple smartphones in the electronics category. Neither are they available on current fashion wear.
Also the products on sale aren’t extremely cheap! In fact the same products available in physical stores offline cost only a fraction more. Compare this to the sales from the past, where product prices dropped as low as one rupee.
An online seller tweeted us his plight after participating in this sale:
Let us know in the comments section below how you have been affected by Flipkart’s new discount strategy.