Several government authorities are following the discounts and freebies offered by e-commerce firms during the festival season sale. The centre had earlier asked leading e-tailers like Flipkart, Amazon and Snapdeal to be transparent and state whether the seller is offering discounts and not pass it off as a discount from the online marketplace.
As a result, all top e-commerce players have taken a cautious approach this year. All prices and discounts for its sales, including the Big Billion Days, are decided by the sellers, said Flipkart.
Post a meeting with top government officials including Nirmala Sitharaman, minister of commerce & industry, the companies were asked to follow all rules. Any violation would be seen as non-compliance with foreign investment guidelines.
To ensure profitability, the e-commerce firms have ordered about 20 to 25% less than last year.
"In terms of value, their orders from us is around 20-25% less than last year. They have mostly opted for low-priced products. Even a small discount on an expensive product means more money being burnt. Affordable products mean they can keep burn rate low," said a senior executive at one of India's largest apparel companies to TOI.
"We have increased number of sellers on our platform by 200% over last Diwali and our operating capacity is 1.5 times of what it was last year," said Amazon India vice-president (category management) Manish Tiwari.