Festive Season Pressures E-Commerce Sellers as WeWork India Reports Strong Q2 Growth

Festive Season Sales Come With Rising Costs

India’s e-commerce sellers are entering the festive season facing a growing challenge: higher operating costs despite efforts by major marketplaces to attract more sellers through lower commissions.

Amazon India and Flipkart have reduced certain seller fees to encourage participation. However, rising cancellation penalties, platform charges and delivery expenses are putting pressure on sellers’ margins. Slower discretionary spending and increasing logistics costs are adding to the strain during one of the busiest shopping periods of the year.

Flipkart’s Zero-Commission Strategy Has a Catch

Flipkart introduced a zero-commission model across several fashion categories in July, helping it nearly double seller onboarding. However, the platform’s penalty structure has created fresh concerns for sellers.

Under the revised system, sellers face a charge of ₹30 for delayed dispatches and ₹60 for cancelled orders, regardless of the order value. These fixed penalties can significantly affect smaller sellers, particularly those handling low-value products, where profit margins are already limited.

As a result, the benefits of zero commission may be partly offset by additional operational charges.

Amazon Revises Its Cancellation Charges

Amazon has also changed how it charges sellers for cancelled orders, introducing penalties linked to order value.

The charges vary by order amount:
- Orders up to ₹10,000: Up to 10% of the order value.
- Orders between ₹10,001 and ₹50,000: Up to 8%.
- Orders between ₹50,001 and ₹1 lakh: Up to 5%.
- Orders above ₹1 lakh: Up to 2%.

An additional 18% GST applies to these charges.

For sellers handling a large number of orders, these penalties can add up quickly, making it harder to protect profitability during periods of high demand.

Delivery Costs Add to the Pressure

Logistics expenses are creating another challenge. Amazon has increased its closing fees, while logistics provider Delhivery has introduced a surcharge on direct-to-consumer shipments. Flipkart is also considering changes to its seller fulfilment fees.

The rapid growth of quick commerce is adding to the complexity. Smaller, more frequent deliveries require more vehicles and can increase waiting times at distribution hubs, pushing up operational costs.

For businesses already working with tight margins, these additional expenses leave less room to absorb unexpected costs.

Sellers Face Limited Room for Error

The combination of platform penalties, delivery surcharges and other marketplace fees is making it increasingly difficult for sellers to manage their costs.

Smaller businesses and sellers dealing in lower-priced products are particularly vulnerable because even modest charges can take a significant bite out of their earnings.

Some sellers have also raised concerns about the difficulty of challenging penalties. Disputes can involve cumbersome processes, even when sellers have evidence that orders were dispatched on time.

As the festive shopping season gathers pace, e-commerce sellers must balance the opportunity to reach more customers with the growing cost of fulfilling orders. Lower commissions may help attract businesses to online marketplaces, but rising penalties and logistics expenses could reduce the financial benefits.

The key question is whether festive-season sales growth will translate into stronger profits for sellers or whether higher operating costs will continue to erode their margins.

WEWORK INDIA REPORTS STRONG Q2 PERFORMANCE

WeWork India delivered a strong financial performance in the second quarter of FY27, with net profit rising 219% year-on-year to ₹20.4 crore. Operating revenue grew 33.6% to ₹767.8 crore, supported by continued expansion in its flexible workspace business.

The company added 11,700 desks during the quarter, marking a record addition. Its operational capacity increased 26.9% year-on-year to 1,45,300 desks across 85 centres in eight cities.

Membership also expanded, rising 32.5% to 1,21,700, while occupancy stood at 83.7%.

Revenue from value-added services and digital offerings grew 38% to ₹108.8 crore, outpacing the growth in core revenue. WeWork India also reported a net cash position of ₹23.1 crore, a significant improvement from net debt of ₹310.5 crore a year earlier.

The results highlight the company’s growth in workspace capacity, membership and supplementary services, alongside an improvement in its financial position.