Flipkart’s former in-house vendor and one of the largest sellers in the Indian e-commerce space, WS Retail has stopped operations on the Bengaluru headquartered e-tailer’s platform.
WS Retail’s revenues declined 67% from Rs 13,900 crore in FY16 to Rs 4,600 crore in FY17. The company reported a net loss of Rs 24 crore for FY17 against a profit of around Rs 5 crore in the previous year.
According to the sources, sales had stopped nearly a year ago. “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, WS Retail used to generate a bulk of the flipkart revenue before e-tailer turned into a marketplace. While it could not be ascertained why it stopped conducting business on Flipkart abruptly, sources said, the government’s directive that mandated ecommerce companies to not source more than 25% of goods from a single seller may have had an adverse impact on the company.
During WS Retail’s peak success, 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 was contributing around 30-40% to the e-tailer’s overall sales. “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.”