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Gati’s ecommerce revenue fell due to govt’s rules curbing discounts

Logistics company Gati said that the government's rules on ecommerce discounts has resulted in slower growth in its ecommerce division. "The e-tailers have not been allowed to influence the prices of the product. There has been a reduction in the discount deals across ecommerce website, this has resulted in a slower growth rate in e-com shipment compared to previous period," Bala Agoramurthy, director and president of Gati KWE said in a call with analysts. Revenues from ecommerce declined 9% to Rs 58 crore on a quarter-on-quarter basis for the June quarter. However, it grew 28% on year-on-year basis. "Also with a cap of 25 % on single seller selling on any market place, this has resulted in a shifting of sales from inventory base seller to other retailer on the market place," Agoramurthy added. Gati added that in May last year, ecommerce business clocked in a GMV rate of $9 billion and that this year the number inched marginally. The company gave a guidance of 50% growth for the ecommerce business for the year. "I do not think we will see 2 years back growth of 150%-200% going forward. But it is still going to be 40%- 50% growth across board," Dhruv Agarwal, chief strategy officer said. COD on orders is right now is around 70% and the management said that it was around 90% about a year and a half back. The ticket size for ecommerce orders were about Rs 2,000. For the quarter, Gati did 45,000 deliveries per day.…

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