Home Retail Flipkart to scale down WS Retail in keeping with new norms

Flipkart to scale down WS Retail in keeping with new norms

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Indian e-commerce giant will drastically scale down contribution of , still the largest seller on its platform, to conform with new rules. New Government norms dictate that no vendor can account for more than 25 per cent of total sales on an online marketplace.

US mutual fund Vanguard slashes Flipkart value by 25 pc
This latest markdown has pegged Flipkart's valuation at USD11.4 billion, as compared to the USD15.2 billion when it last raised capital in July 2015

This process will take place in the next 12-18 months.

Flipkart will now focus on bulking up market share of other sellers so that they dominate sales. Mobiles and consumer electronics, the two biggest segments, will increasingly be sold via new vendors, not through WS Retail.

WS Retail on Flipkart’s platform accounts for substantial shares of sales on Flipkart. The company sells a range of products, from shoes to home appliances and electronics on Flipkart. The exact shares have not been publicly disclosed, but it is believed to have shares of well over 25 per cent.

WS Retail, set up nearly seven years ago by Flipkart founders Sachin Bansal and Binny Bansal, clocked sales of Rs 10,163 crore or nearly three-fourths of total turnover in FY15, trebling its business from Rs 3,135 crore in the previous financial year.

Four years ago, the Bansals sold their stake to former OnMobile Global chief operating officer Rajeev Kuchhal and other investors.