Tech3 | The mystery sellers of Amazon and Flipkart; Bluestone valuation cut ahead of IPO; and more

One quick thing: Indian audio firms diversify as China curbs rare earth exports 

In today’s newsletter:

• The mystery sellers of Amazon and Flipkart
• Bluestone valuation cut ahead of IPO
• UPI hits record 700 mn daily transactions

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The mystery sellers of Amazon and Flipkart

The top Amazon or Flipkart sellers are raking in tens of thousands of crores in revenues, but they have hardly any profits. 

Tell me more: We analysed a total of 10 sellers, among the top ones, on Amazon and Flipkart, and found a mysterious trend. 

• These 10 sellers have revenues of around Rs 72,000 crore and together have a profit of just Rs 230 crore, according to our analysis
• A profit margin of 0.3% is unheard of, especially at the scale they operate on and after being in business for years 

So what?: Sure, one may argue that this is the case with several legit new-age companies in India, but here’s why these 10 sellers stand out.

• The high top lines but negligible profit margins have attracted attention from regulatory authorities
• The Competition Commission of India (CCI), in 2022, initiated inquiries on these sellers to check if they may have received preferential treatment on online platforms, potentially affecting competition

Not just the CCI, they are facing heat from the Directorate of Enforcement (ED), too. 

• ED’s investigations, launched in 2024, are looking into the structure and ownership of these entities
• It is also examining if these sellers follow India’s FDI rules and relevant provisions under the Prevention of Money Laundering Act (PMLA)
• The ED is also investigating links between individuals associated with certain seller entities and former executives from one of the platforms

Under the current Indian policy, e-commerce platforms that receive foreign direct investment are not permitted to operate inventory-based models or maintain direct or indirect control over sellers.

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