Flipkart introduces third category of sellers

To scale down the dominance of preferred sellers, Flipkart plans to introduce a third category of sellers, codenamed gamma sellers, on its platform. The Walmart-owned online retailer is enrolling more than a dozen independent gamma sellers to deal with future changes in India’s FDI laws and restrict the share of sales of any online seller.

As a part of its gamma initiative, companies have been approached to become sellers on the platform without any equity held by Flipkart. At present, Flipkart has a two-tiered seller structure: a handful of preferred vendors called alpha sellers and a beta layer of wholesale sellers that was put in place when the rules changed in 2018 to curtail the dominance of large sellers.

Alpha sellers, including RetailNet and OmniTechRetail, each account for a high-single digit or double-digit percentage of total sales on the country’s largest online marketplace. India has changed rules to ensure that online retail platform operators conform to their role as marketplace facilitators and have no control over sellers and inventory supplies.

Many distributors would earlier route their supplies to Flipkart India, the company’s wholesale unit, which sold products to the preferred sellers. However, now Flipkart has asked distributors to route their supplies to the newly enrolled gamma sellers.