Flipkart has increased the commissions it charges from vendors in the apparel category, a month after the latest FDI norms for online marketplaces kicked in.
Effective March 1, Flipkart has increased commissions it charges on western wear, kurtis, innerwear, smartwatches, blazers and waistcoats. The increase in commissions range between 6.5% and 15% across these segments. The smartwatch category has seen the highest change in commissions, increasing from 20% to 23%, representing a 15% hike for sellers. The commissions charged on western wear have increased from 15% to 16%, representing a 6.67% change.
Sellers said they received mails from Flipkart alerting them of the change in fee structure the day the changes were being introduced. Usually an online marketplace would intimate sellers 15 days to a month in advance.“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,” said a member of the All India Online Vendor Association.
Flipkart did not respond to an emailed query sent by ET until press time. Industry experts said ecommerce marketplaces change their commissions based on business goals they have set for themselves. In this case, Flipkart could be turning on the revenue taps from the apparel category, which has become quite large over the years, said one person aware of the change. Apparel is the second biggest driver of gross merchandise value (GMV) for Flipkart and makes up the largest category in terms of volumes. The company has claimed that it is the single-largest online fashion destination, even excluding subsidiaries Myntra and Jabong.
Amazon last month slashed rates for categories such as fashion, among others as ET reported. While the US online retail giant did slash commissions by as much as 50% on FMCG products, it began rewarding highperforming sellers in the fashion segment with special rates.