According to reports from The Times of India, Flipkart and Amazon are mounting a fee war by eliminating commissions or fees charged to sellers for transacting on their platforms. The companies have implemented this strategy twice since last year for a wide range of products across categories priced within ₹1,000. This approach specifically targets lower price points that drive a large part of sales in smaller cities and towns, pushing up overall volumes for both firms.
As reported by The Times of India, Flipkart also removed commission altogether for the fashion category earlier this month. Sellers on both platforms typically pay fees to the companies for every product sold through their websites, making this elimination a significant cost reduction measure for merchants.
According to Ankur Bisen, partner at The Knowledge Company, as reported by The Times of India, e-commerce was largely a top 10-city play until now. As it spreads to smaller cities, firms will have to strategise differently because buying patterns, shopping behavior, and price points that work in smaller cities are distinct from metros. The reduction in fees translates into lower cost of business for sellers, who pass on these benefits to consumers through lower pricing.
As reported by The Times of India, the move also incentivises smaller, often local sellers to come on board, widening selection for consumers in a market where regional nuances shape buying habits. This strategy positions both platforms to capture a larger share of the expanding e-commerce market in smaller Indian cities and towns.
