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Know how Flipkart, Amazon, Snapdeal offer huge discounts

E-commerce companies including Flipkart, Amazon and Snapdeal are funding discounts on their sites using mechanisms as complex as the complicated structures some have adopted to circumvent foreign direct investment (FDI) laws in India.
The three major e-commerce companies operating in India—Flipkart, Amazon and Snapdeal—all operate as marketplaces. That’s primarily because Indian law doesn’t allow FDI in e-commerce sites that sell directly to customers, but allows it in marketplaces that link sellers and buyers. The marketplaces also provide services such as payment, storage and delivery.
As direct retail is banned, marketplaces are not allowed to exercise control over the product prices of the sellers on their platforms, including on the matter of discounts. Still, Flipkart, Amazon and Snapdeal do actually have a significant say in deciding product prices as all the three sites finance part and, in some cases, the full amount of discounts offered by sellers albeit in an indirect ma…

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