The largest e-commerce portal in the country, Flipkart is on the verge of filing over a dozen cases against many companies. These cases are to recover its dues that are worth crores from them for purportedly not paying them for placing ads on the platform of Flipkart.
There are over 20 Indian and global companies that have not paid Flipkart and the dues range from Rs 90,000 to several crores each, claimed a person familiar with the issue. In April, Flipkart filed the first such case against Western Digital, a U.S. based computer data storage organization in the Delhi High Court for not paying over Rs 1 crore for placing ads on the platform of Flipkart.
While the media buyers claim that Amazon follows a prepaid system for placing ads on its website where the brands must pay in advance for the purpose, most indigenous websites do not have systems like that in place. At Amazon, most similar companies should pre-pay for buying ad space while the firm would raise invoices for the big media buyers who will pay later.
The media buyers claim that Flipkart does not possess such a pre-payment system for the digital advertisers on the platform and it is relying on getting payments later that results in such non-payment issues.
Last year, Flipkart offered its platform for many other brands and sellers in order to advertise by paying some amount of fees. The popups and banners would lead the consumers to offers from the sellers in the Flipkart network and directly to the pages of the brands.
IAMAI (Internet and Mobile Association of India) has many publishers who have set up a committee to develop a system for payment recovery for the member publishers. This committee will follow up on the defaults and payments with the advertisers and digital networks regularly.