GOQii sends legal notice to Flipkart against deep discounts

Kolkata: Ratan Tata-backed smart wearables maker GOQii Technologies said it will take legal action against the deep discounting of its products on Flipkart, which was in violation of its sales agreement with the marketplace.

In a legal notice sent to the Walmart-owned online marketplace on Saturday, GOQii said such discounting of its products also violates the foreign investment policy in ecommerce.

The company has reached out to the DIPP and Internal Trade and the Competition Commission of India.


GOQii Technologies founder Vishal Gondal said it has an agreement with Flipkart on the sale of its fitness bands. Since the discounts have not stopped even after sending the legal notice, it will now take the marketplace to court.


Gondal said the deep discounting on its products started in the first week of May. Its products were sold at “much below the cost price and against the sales agreement whereby any such discounting is offered at mutual terms,” he said.

Gondal has reached out to Flipkart, including the chief executive officer, several times to stop the discounts but to no avail.

“Flipkart seems to have moved away from deep-discounting large brands and mobile phones, but for a startup like us it creates a bigger business disruption. Since we also supply to corporates, some orders got cancelled. Trade partners like Croma and distributors are unhappy.

We have never faced a situation like this in Amazon,” Gondal said.

A Flipkart spokesperson said Flipkart Internet owns an online marketplace platform, and does not decide the prices at which independent sellers sell their products on its marketplace platform.

"It is compliant with all Indian laws, including the regulations regarding foreign investment in e-commerce, as well as the Competition Act, 2002. We are reviewing the allegations raised by the seller and responding appropriately," the person said.

GOQii was the second-largest smart band in the Indian market, after leader Xiaomi and Titan in the third place, according to data from International Data Corporation for the third quarter of calendar 2018. Samsung, Fitbit and Apple are the other big brands in this segment, which is growing at 15-20%, driven by awareness about fitness.

In the notice, which ET has seen, GOQii’s legal firm Vertices Partners has written that the products are being sold on Flipkart “at an unauthorised 70 to 80% discount, which is predatory pricing by Flipkart and clearly an anti-competition practice under Competition Act 2002.”