Flipkart’s Agra vendors miss out on mega sale due to logistics glitch


September 16, 2015

Varun Jain, The Economic Times
New Delhi, 16 September 2015

Flipkart’s ‘Big Billion Days’ sale has yet again run into glitches this year, and this time the ecommerce giant is tendering apologies to its sellers in Agra whose products have been removed from the site for almost two days now due to delivery issues.

Various vendors in the city ET spoke to complained that Flipkart has blocked their products to be sold on its ecommerce site amid a rush of consumers. They said the listings of their products were not visible on the company’s website since the second day of the mega sale event after they saw major traction on Tuesday, the first day of sale.

"We were waiting for the Big Billion Days sale and have kept ourselves adequately stocked to meet the consumer demands. We got six times more order than what we usually get, on the first day of the event. But on the second day we were surprised to see our orders fell to zero. This is when we realised that something is wrong," said an Agra-based vendor who sells artificial jewellery on Flipkart.

One footwear vendor who received around 120 orders on day one said he has not been able to dispatch the whole order even on the third day because Flipkart’s logistics partner is only collecting partial orders, saying they have been asked only to collect certain orders owing to huge demand.

Experts said this reveals gaps in Flipkart’s logistics as the company has failed to cope with the huge amount of business the Big Billion Days is generating this year as well. The mega sale event had run into glitches last year when thousands of customers complained about products being sold out on the website even before they can hit buy button. There were complains of company intentionally increasing the prices of some products to make the discount look even bigger and the website also crashed several time. Eventually Flipkart’s co-founders Sachin Bansal and Binny Bansal had to apologize to the customers after the event.

Manish Maheshwari, vice president and head of sellers’ ecosystem at Flipkart, said consumer demand is around 40% more than the 3-4 times increase the company had expected "and there are implications of that".

"Being a marketplace, everything that is ordered by the consumer has to be supplied by the seller. And we have limited capacity in terms of how many people we have and how many collections we can do in a day," said Maheshwari. "So, it might be true that for a day we might have switched off the pick up from the Agra hub and therefore sellers in this region would have been impacted," he said.

"But they might have received enough demand on day one. This is a temporary block and we switch them back again once the backlog is cleared up," Maheshwari added.

According to the Agra vendors, they got an automated message from Flipkart on their seller account: "To ensure customers receive their orders on time and have a great experience buying your products, we have to temporarily restrict the order flow for sellers in your area. We will be reverting to normal order flow by tomorrow morning or as soon as the situation eases up. We apologise for the inconvenience and thank you for the continued support."

However, many vendors in Agra region said the services were not restored as of Thursday afternoon.

Some of the vendors said their listings were showing on Flipkart site/app, but consumers could not place order because either ‘Add to Cart’ option was disabled or they would be repeatedly greeted by ‘The item is currently unavailable in your pin-code’.

Devangshu Dutta, chief executive of retail consultancy Third Eyesight, said the peak capacity that Flipkart planned for Agra region might have reached and "now they were not able to pick any more orders to deliver".

"There is a very clear indication of the infrastructure gap," Dutta said. "If you are looking at rapid ramp up of business it cannot happen without the requisite infrastructure because all such infrastructure capacity planning has to be done on the basis of peak demand and if every time you are building up demand only to find it blocked by lack of capacity then obviously it is a problem," he said.

Another industry expert who did not wish to be named said it is a clear disappointment for vendors who are losing out on business, which they know is theirs as consumer orders were coming on day one. "There must be an investment made from the vendors’ side for one of the biggest sales in the ecommerce industry. That investment has essentially gone down the drain," the person said.

Maheshwari of Flipkart said that while it needs to add more capacities to meet the ever-growing demand, it is already following a scientific process to keep all stakeholders happy.

He said that when certain hubs starts getting more order than expected, the company switches off the collection hub of that particular region and the demand then gets diverted to the region where it is low. During this period, all the vendors linked to that collection centre will not be able to generate new orders. The company switches on the hub again once all the backlog has been cleared, Maheshwari said.

(Published in The Economic Times.)