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Brands In Catch-22: Ecommerce Platform Fees Grow, Margins Shrink
- Ecommerce is booming in India, with a $103 Bn market projected to reach $325 Bn by 2030.
- Direct-to-customer (D2C) and quick commerce segments are growing rapidly within the ecommerce landscape.
- Platform fees, commissions, storage and advertising costs are major concerns for D2C brands on ecommerce platforms.
- Platform fees on open marketplaces like Amazon and Flipkart can range from 30% to 40% of the selling price.
- Advertising fees on ecommerce platforms can be as high as 10% to 40% of the selling price, impacting small brands significantly.
- Quick commerce platforms charge commissions ranging from 35% to 45% of the MRP, posing challenges for D2C brands.
- Closed marketplaces like Tata CLiQ offer stability with standard fee structures and curated experiences.
- D2C brands face challenges in balancing costs between traditional ecommerce, quick commerce, and D2C channels.
- Moving towards D2C offers higher margins but requires investments in advertising, logistics, and infrastructure.
- As the ecommerce landscape evolves, the focus shifts towards transparency, fair fees, and seller-friendly policies.
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