Amazon and Walmart-owned Flipkart have assured brands there will be no change in the pricing and discount strategy on their ecommerce marketplaces and it will be business as usual during their ongoing Republic Day and Great Indian sales on Flipkart and Amazon respectively. Sales would offer discounts in some categories such as televisions as steep as Diwali discounts. To protest against these steep discounts, brick-and-mortar traders have approached the central government which has directed these ecommerce marketplaces to comply with laws that protect the rights of small retailers against unfair cashrich ecommerce companies.
The Competition Commission of India (CCI) has also initiated an inquiry against online marketplaces over discounting and preferential treatment of vendors. Small traders accuse the marketplaces of breaking overseas investment rules and engaging in predatory pricing. The marketplaces have made it clear to the brands that any discounts will have to be borne by the brand or the seller. Also, even if a product is sold at its lowest price, there should be at least 10 per cent-plus margin for all three combined — brand, seller and marketplace.
Both Amazon and Flipkart are working on a margin-based strategy where brands offer the discount, while the marketplace supports them on visibility and a stronger digital presence.