Amazon has reportedly witnessed a 250 percent year-on-year growth in bringing new sellers on board as it looks to tap into the booming e-commerce market in India.
According to reports, the high growth figure is attributed to the e-commerce major’s decision to reduce commissions that are charged to sellers for multiple categories like electronic goods, mobile phones and tablets in order to help them sell at a lower cost.
Amazon, which competes with the likes of Flipkart and Snapdeal, has cut its commissions by 25-30 per cent across categories.
The commissions will be reduced by 2-7 percent with immediate effect, according to multiple sources. This move is seen as a market strategy by Amazon to counter its rival Flipkart’s decision to increase seller commissions by 5-6 percent from June 20. Sellers were unhappy with Flipkart’s decision on this matter.
Amazon India believes that these revised rates can significantly help sellers to perform even better and succeed in their business.
“We started with 100 sellers 3 years ago and now we have over 85,000 sellers growing at 250 percent year-on-year and adding over 90,000 products everyday. We hope that sellers take advantage of these revised rates and grow their business, said a company spokesperson.
According to sources, Amazon had decreased the commission rates for mobiles and tablets from 5 percent to 3.5%, laptops from 4 percent to 3percent, non-education software products from 8% to 5% and educational products from 12 percent to 5 percent.
A spokesperson from All India Online Vendors Association (AIOVA) told Financial Express, “This is an alternative to discounts that were offered to consumers by the marketplaces. This is a move not just by Amazon, but also by other players, just to get away with the new DIPP rules on discounting.”
In an earlier report, Amazon tried to benefit sellers by reducing the shipping costs and also trippled its fulfillment centers capacity over last year. The company has 21 fulfillment centers with a storage capacity of 5 million cubic feet across all fulfillment centers.
The company is making multi-billion dollar investments in India, has over 85,000 sellers on board. “We started with 100 sellers three years ago and now we have over 85,000 sellers, growing at 250 percent year-on-year and adding over 90,000 products a day,” an Amazon India spokesperson said in a statement.
According to a Neilson study, Amazon had the highest top of the mind recall (25 percent), Flipkart stood second (21 percent) and Snapdeal (20 percent), it added.