WS Retail which is Flipkart’s ex-in-house vendor and one of the biggest sellers in the Indian e-commerce sector has announced that it has stopped the sale of its products on the platform of Flipkart.
The revenues of WS Retail declined 67% from Rs 13,900 crore in fiscal 2016 to Rs 4,600 crore in fiscal 2017. The company reported a net loss of Rs 24 crore for the financial year 2017, however, in the previous year, it made a profit of around Rs 5 crore.
“As Flipkart reduced its dependency on WS Retail and shifted a large chunk of its sales to other vendors, the company may have found it difficult to sustain operations,” said a source.
Founded by Flipkart founders Sachin Bansal and Binny Bansal, who later sold it to investors, WS Retail used to generate a bulk of the e-tailer’s revenue before Flipkart turned into a marketplace.
The reason behind this move has not been yet ascertained. This event took place abruptly, and the sources say that the government’s directive that mandated e-commerce companies to not source more than 25% of goods from a single seller may have had a vicious impact on the company.
“I was surprised to not see WS Retail on Flipkart because our products were sold by it on the marketplace earlier,” said the CEO of a global sportswear firm. “When I checked recently, I saw another seller Retail-Net selling our goods.”
During the days of WS Retail’s on Flipkart, several small sellers had complained that e-commerce giants were preferring a few large sellers over the smaller ones. In 2016, while Flipkart was trying to offset large contributions from a few major sellers on its platform, WS Retail contributed to around 30-40% to the e-tailer’s overall sales.