In the largest acquisition (worth $16 billion) the country has ever seen, Walmart bought Flipkart. It also got the feat of the biggest purchase of an e-commerce company. Despite the hefty acquisition price, India’s largest retailer business is running in loss.
Walmart has decided to conduct surprise checks on sellers to ensure the product quality. Given the poor quality, the company has been facing about 30% return rate.
Flipkart will Soon Start Surprise Audits on Sellers
Everyone is shifting their focus to the web nowadays. The easier internet access and thrashed tariff rates have made it possible for anyone to go online. For the same reason, e-commerce became an ordinary thing even in remote villages.
Flipkart, under the previous leadership faced around 30% return rate, the cause of which is mostly poor product quality. In their first attempt to grow the profit column of the company, Walmart has decided to conduct surprise quality checks on sellers.
If sellers fail to pass the test, they will lose the Fassured badge (given to selected products for quality and speed) or even be delisted from the platform altogether. We have got to know this latest change from the email the company has sent to all the sellers.
Flipkart wants to decrease the product return rate, which as you read earlier is 30% right now. They aim at bringing it all the way down to 15-20% and increasing the sales. We never got an official figure for the return rate of the platform. The average percentage for the whole industry is 30%.
RedSeer Consulting, which observes the e-commerce industry has gone behind the return rate and found it to be around 30% (the difference between shipped and fulfilled gross merchandise value). The mobile phone and appliance category has it least whereas fashion comes on top. E-commerce marketplaces, including Flipkart, have to focus on delivering the right product to the customers so that they can regain the losing revenue.
Flipkart has named the initiative Utkarsh, through which they help the sellers improve their business by increasing the quality of their products.
Anil Goteti, Vice President of Flipkart has told the media that their team will visit various seller locations to help identify possible gaps in the quality of the products on Flipkart and they will use artificial intelligence coupled with machine learning to form the guidelines. He also added that the test will be considered a failure if 70% of a seller’s product go below par. The second check will take place within 15 days.