In order to comply with new FDI laws, Myntra (acquired by Flipkart) has affirmed that it is not acquiring any equity stake in sellers on the platform. In essence, Myntra receives a large sum of business through brand contracts and private brand names. The shift in the companys structure infers that it seeks to sell goods through third-party traders instead of directly selling to brand stores.
Other e-tailers are also trailing the same convention to avert flouting the newly amended FDI laws. Amazon, an inflictor of FDI laws, has brought new sellers on board to retreat from the earlier acquisition of equity stakes.
So, the new changes in the e-tailers are as follows:
(Source: ET news)
An anonymous source, who is conversed with ongoing restructuring, said that this will mean a longer paper trail to be compliant, and a middleman to squeeze margins.
Over this matter, Flipkart (acquirer of Myntra) reports, We did not have any equity ownership issues to contend with in our seller base. We are committed to full compliance with the new regulations. (Source: ET news)