Flipkart increases its commission on apparel items following new FDI norms

By

Isabelle Crossley

Published
Mar 4, 2019

Flipkart has increased the amount of commission it takes on a range of apparel items following the foreign direct investment (FDI) norms that came into effect a month ago. 

The e-commerce platform Flipkart introduced higher commission for a number of fashion related product categories, effective from March 1. The increase in commission ranged between 6.5 percent and 15 percent with western wear commission increasing by 6.67 percent and smart watches by 15 percent. Other items affected include kurtas and inner-wear.

The changes were put into effect swiftly, according to ET Bureau. Where sellers are usually given between two weeks and a month notice of any seller fee changes, sellers reported receiving notification on the day that the changes were put in place.

A member of the All India Online Vendor Association (AIOVA) told ET Bureau: “Platforms need to propose any changes with proper consultation and time window. Flipkart should reverse these changes, or roll out unconditional incentives to negate effect of such changes.”

Flipkart’s clothing and fashion category has grown in recent years and now represents a significant portion of the business’ total revenue.

By increasing seller fees, Flipkart appears to be looking to raise funds from a successful product category to offset losses incurred by the new FDI regulations, which greatly restrict any form of private label business.