Report: Market of E-Commerce giants Post GST- UP or Down?

Posted on July 7, 2017

The rollout of Goods and Service Tax (GST) which started implementing from July 1 has been creating sleepless nights for small vendors. Let’s take a look at what E-commerce Giants Flipkart and Amazon have been up to:

All the e-commerce websites are continuing 80% discount on selected products despite the GST roll out. The websites provide 70% off discount on all fashion products which include some elite brands as well. Whereas sportswear gets a whopping 80% discount on Flipkart and Amazon. Perfumes and deodorants are selling at minimum 50% off on MRP.

Flipkart is also offering up to 35% off on large appliances like washing machines and vacuum cleaners. 18% tax on books and cameras also seemed to have created zero impact on sellers on Flipkart. On the other hand, Amazon is offering up to 50% off on certain books.

Utkarsh Biradar, Senior VP Products at Shopclues said, ” Sellers on these marketplaces have a significant upside in the volume of sales since they are able to reach customers across the country. We do not see any difference in taxes on goods sold online and offline even with GST and hence consumption or demand is unlikely to change.”

Flipkart and Amazon have also resumed the delivery of higher valued goods in states of UP, Bihar, and Gujarat. The delivery of these states was paused due to GST initiative. Apart from this, the websites have also stated free delivery for the states.

Reportedly, the company took this decision, as the GST roll-out in the country has eased off many tax and billing related difficulties. Both Amazon and Flipkart were delivering phones under Rs 5,000 only to select cities in UP and Gujarat and was not delivering at all in Bihar. As a result, both players ended up losing thousands of crores in business.

According to industry reports, the share of non-metros to e-commerce revenues is about 60-70 percent. Hence, it is imperative for smaller urban centers to allow free movement of goods and enable companies to conduct hassle-free operations. For Flipkart particularly this augurs well as it can now tap into new and existing customers at a time when rival Amazon is breathing down its neck with a $2 billion investment in India. Read more Business news.

Report: Market of E-Commerce giants Post GST- UP or Down?