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Flipkart changed discount strategy for sale

Update On :27 May 2016

Flipkart changed discount strategy for sale

Flipkart, the India's biggest ecommerce company has asked sellers and brands to agree on a lower price and margin to offer rebates to consumers, instead of the marketplace burning money to pass on deep discounts.

The discounting method was changed to ensure compliance with a recent government notification disallowing ecommerce marketplaces from directly or indirectly influencing sale prices and to maintain a level playing field with brick-and-mortar retailers, said three senior executives from leading brands, who are part of the current Flipkart sale, asking not to be identified.

The ongoing Flipkart sale is the first major one since the government issued the notification in March allowing full foreign direct investment (FDI) in marketplaces with the rider that they will not influence prices of goods sold.

As a result, discounts during the sale are mostly on online-exclusive models and they are missing for big brands such as Apple and Samsung's flagship smartphones in electronics and the current line-up of fashion wear.

Products that are also available in brick-and-mortar stores are only marginally less expensive on Flipkart during the sale. "All prices during the Flipkart sales are mutually agreed," said Godrej Appliances business head Kamal Nandi, refusing to share details. Brands have passed on inventory just for the sale period at a lower price to sellers at Flipkart and they have also agreed on a lower margin to bring down prices, another top executive with a consumer electronics brand said. "The notification does not stop the brands from offering discounts," he said.

Flipkart, as a responsible marketplace, is fully compliant with all the applicable laws and regulations, including the Department of Industrial Policy & Promotion guidelines, a company spokesperson said. "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," the spokesperson said.

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