Amazon and Flipkart, the two biggest e-commerce sites in India, reached a major milestone in FY24 when their top sellers together recorded yearly sales of about Rs 72,000 crore. The large number indicates the expanding scope and impact of digital commerce on the nation’s retail scene. Ten main seller entities, each of which takes advantage of the platforms’ vast consumer base, are primarily responsible for the remarkable topline figures.
One important member of this group is the Salarpuria Sattva Group, situated in Bengaluru. Historically recognized for its real estate endeavors, the business is now active in e-commerce through two major subsidiaries: Dawntech Electronics and Darshita Aashiyana. These businesses put themselves at the forefront of online retail with a combined turnover of over Rs 23,800 crore during the fiscal year. The existence of extensive operations among marketplace sellers is further shown by the seller Cocoblu Retail, which is supported by RattanIndia Enterprises and declared an annual turnover of Rs 5,500 crore.
While the revenues are impressive, an important aspect to note is the relatively low profit margins. For example, both Darshita Aashiyana and Dawntech Electronics reported net profits of Rs 72 crore each, resulting in profit margins of less than 1%. Overall, the top ten sellers generated approximately Rs 230 crore in profit, translating to a composite profit margin of only about 0.3%. Despite commanding massive sales volumes, these sellers are operating on razor-thin margins, which has brought increased scrutiny from various stakeholders.
Regulatory Investigations and Sector Scrutiny:
The performance and operating models of these top sellers have not escaped the attention of regulatory bodies. Both the Competition Commission of India (CCI) and the Enforcement Directorate (ED) have launched inquiries into multiple aspects of their business. The CCI began its probe in 2022, focusing primarily on the nature of relationships between sellers and the marketplaces. Key questions include whether certain sellers may be benefiting from preferential treatment, affecting sectoral competition.
The investigation aims to assess the transparency and fairness of the supply terms offered to top sellers, especially in categories like smartphones and televisions, where some entities reportedly secured highly favorable deals from major consumer brands. Such arrangements have raised concerns about whether smaller or new sellers are being disadvantaged on the platforms.
From a legal standpoint, several of these large seller entities have contested regulatory actions, filing petitions across various High Courts. As a result, the Supreme Court recently directed that ongoing cases be consolidated and heard by the Karnataka High Court. Alongside, the ED is also examining adherence to foreign direct investment (FDI) policies and is investigating links between certain seller companies and former executives associated with one of the e-commerce platforms.
Business Models and the Role of Large Seller Entities:
A defining feature of India’s e-commerce space is the emergence of large seller entities that act as anchors within the marketplace ecosystem. These firms handle immense procurement volumes and are central to the rapid fulfillment models favored by platforms such as Amazon and Flipkart. The structure allows for operational scale and negotiation power with brands, benefiting end customers through competitive pricing and better service levels.
Critics counter that the marketplace model envisioned by Indian e-commerce policy, which aims to promote broad-based participation and platform neutrality, is incompatible with such concentration of sales within a small number of suppliers. Discussions over how digital commerce should develop to guarantee fair competition have been sparked by the dominance of a few number of high-volume vendors, many of whom have strong connections to the marketplace operators or extensive logistical capabilities.
The slim profit margins reported by these seller entities point to intense price competition, heightened operational costs, and the enormous scale required to remain financially viable. For some firms, the focus remains on gaining market share and strengthening long-term positioning, even if near-term profitability is muted.
E-Commerce Regulation and Industry Implications:
The revelations of high revenues but marginal profits have broader implications for the regulatory landscape and the future development of e-commerce in India. Authorities are expected to use findings from ongoing investigations to inform policy, particularly around platform neutrality and digital infrastructure initiatives such as the Open Network for Digital Commerce (ONDC). The goal is to ensure that online marketplaces remain open, fair, and accessible to a range of sellers, big and small.
Top sellers’ performance highlights the complexity and dynamism of India’s e-commerce industry as they move through inspection. There will probably be a greater drive for clear regulations and open business practices, which will have an impact on how marketplaces interact with vendors, organize supply chains, and interact with customers. As digital commerce continues to transform the Indian retail scene, the sector’s progress will ultimately depend on striking a balance between profitable growth, competitiveness, and inclusive participation.
