Shambhavi Anand, The Economic
New Delhi, 11 May 2016
has barred sellers on its platform from giving more than 70% discount
on the maximum retail price on most products from May 13, as the
ecommerce firm aims to tackle the increasing return of merchandise from
In a communication sent to sellers on May 9, the company
said: "We have noticed deeply discounted products often do not meet
expectations, leading to increased returns and customer
dissatisfaction. To improve customer experience, you would not be able
to list a new product or update the price of a listed product with more
than 70% discount on MRP."
Sellers on leading marketplaces,
including Snapdeal, have been complaining of increased returns by
buyers due to the "no questions asked" return policy of the ecommerce
Increased returns is a logistical nightmare as
inventory is stuck in transit for long time and also cause accounting
errors, say sellers.
A Snapdeal spokesperson said this is a way
to providing consumer insights and assisting the sellers in making a
sale. "In this instance, we have shared with our sellers that any
discounts that the consumers perceive as unrealistic may adversely
impact the consumer perception about the quality of products," the
"Laying down the operating rules on our
marketplace and providing market information is an ongoing activity.
The price is determined by the sellers based on various inputs they may
receive from multiple sources, including from us."
to Devangshu Dutta, chief executive of retail consultancy firm Third
Eyesight, Snapdeal's strategy might go down well with India's new
foreign investment policy in ecommerce. But sellers won't like
intent of the new ecommerce policy is clear. The government wants to
control deep discounting. So the government may not have any problem
with Snapdeal's diktat. However, since this policy is influencing the
prices, sellers could challenge it," Dutta said.
the latest government guidelines, online marketplaces are not allowed
to influence the price of goods and services directly or indirectly.
some sellers say this is a "good move", others see it as a hindrance
when they try to clear piled up inventory. The All India Online Vendors
Association, which represents medium-to-large sellers on various
ecommerce platforms, said, "Snapdeal should discuss such policies with
vendors before putting any cap on discounts."