As announced by e-commerce giants –Amazon & Flipkart–from September 29, the debate about deep discounting has begun to catch the wind back. The Competition Commission of India (CCI) has been involved days after the traders ' body, the Confederation of All Traders (CAIT) requested a ban on festive sales.

E-commerce sites are pinning hopes on the festive season after slow sales in the first two years, accounting for 60 percent of online marketplaces revenue. Flipkart and Amazon plan to ramp up sales by offering attractive discounts. CAIT has previously pointed out that by manipulating market prices, such promotions build an uneven playing field.

India's Competition Commission (CCI) said that "an inquiry merits" exclusive deals between mobile phone brands and e-commerce sites, as well as claims of e-commerce firms providing preferential treatment to certain sellers.The probe is the latest setback for Amazon and Walmart's Flipkart, claimed to breach the foreign investment rules of the country by Indian brick-and-mortar traders.

Both the companies deny those charges.

The CCI also wants its investigation arm to test the discounting practices of the e-commerce companies as well as their relationship with those sellers, it said in its 11-page order.

The probe is the latest setback for Amazon and Walmart's Flipkart, accused by Indian brick and mortar traders to breach the foreign investment rules of the country and burn billions of dollars to deliver steep discounts that hurt small traders.

 India's latest ecommerce policy is likely to allow ecommerce marketplaces such as Amazon and Flipkart to show that the online seller and not the ecommerce site are selling the product discounts. 

Reportedly, the policy could even set a limit on the maximum discount that a company would give.Certain issues said to be included in the ecommerce strategy are data localisation, as well as a new regulatory body to track ecommerce players operating in India. In addition, the policy could also impose regulations on heavy cashbacks offered on various platforms, especially mobile wallets.

Such e-commerce companies are selling products at a really low margin to attract customers, keep them loyal, addicted, etc. When they sell on the MRP, they won't be able to make profits because their earnings will be really low and they won't even be able to pay their employees.

They make profits but are at net loss if we consider warehousing, logistics, packaging, employees like SDE, managers, HR, board members and other office bills to be spent on different things Flipkart spends.

According to Wikipedia, every month Ekart logistics delivers approximately 1.2 cr shipment. If they increase to the front fold, they may be profitable.

So the morale of the above story is, they sell products for zero benefit to attract more customers. The greater the number of consumers buying from the website, the greater the profits. The number of products sold is directly proportional to the amount of investment they would earn.When they sell it on mrp, they will lose because the sales volume will be much smaller and these businesses will benefit by volume and not by margin.

THANKYOU!!