Multinational e-tail giant Amazon has upped the ante in the battle for a bigger pie of the Indian ecommerce space with a reduction in commission charges for sellers using its platform for marketing electronic goods such as smartphones and computer software products used for educating schoolchildren.
According to market analysts, part of the reduction in commission charges is expected to be passed on to consumers.
The cut comes at time when arch-rival Flipkart is facing trouble with sellers over high commission charges and Snapdeal is also looking at ways to cut losses. The two companies have also seen a scaling down of their valuation.
Both the Indian e-tailers are under pressure from investors to increase earnings and higher commissions on goods sold on their platform is the obvious thing to do.
Amazon, on the other hand, is sitting pretty on a $3-billion war chest with another $2 billion committed by chief executive officer Jeff Bezos during Prime Minister Narednra Modi's trip to the US giving it a clear financial edge over its Indian rivals.
A third of all goods sold online by the leading three e-commerce marketplaces fall under the electronics category. Amazon has reduced the commissions for smartphones and tablets by up to 30 per cent and is charging sellers a mere three per cent of the price of the product.
The biggest drop in commissions on Amazon was seen in the electronic content and software categories, where the firm reduced its commission from 12 per cent to five per cent on movies and educational software. These include animation videos and e-learning software for school kids.
Amazon had raised the commission charges for some products in April.
The commission on mobile phone accessories was raised by as much as nine per cent while that on luggage and shoes was by two per cent.
"Yes, we lowered the rates for certain categories. We think these revised rates can significantly help sellers to perform even better and succeed in their business. We hope that sellers take advantage of these revised rates and grow their business," Amazon India said in a statement on Thursday.
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