By Devangi Narang
Amazon India has reportedly surpassed Flipkart in terms of value and volume over the past eighteen months. Amazon India said that the company’s gross merchandise sales in unit terms grew 88% in the June quarter as compared to the same period last year. On the other hand, Flipkart grew at 65-70% for the same period.
Amazon’s jump in gross sales has outpaced the overall growth of the e-commerce industry (which stood at 20% for the June quarter). This indicates that the industry revived in the April-June quarter after staying dull post demonetisation last year.
What drove this change?
This surge has three essential reasons. Firstly, it was mainly due to a large number of sale events held before the introduction of the Goods and Services Tax last month. Secondly, cash started coming back into the economy after November’s demonetisation, which increased demand. Thirdly, Snapdeal’s drastic fall in sales in the last couple of quarters due to funding crunch contributed to the increased sales at Amazon and Flipkart.
Moreover, over the past one year, Amazon has been introducing key initiatives which have helped expand its reach in the Indian e-commerce market. These include ‘Amazon Prime’ and ‘Amazon Prime Video’. Both of these are paid services that give shoppers/ viewers a few distinctive advantages.
Amazon’s amazing growth
Amazon claims that it has now become the market leader in India. It has grown consistently across all parameters including traffic, new customer acquisition, as well as things that matter to the customer—selection, value and convenience. All this is a testament to strong brand recall and loyalty among customers.
Third party data, like that of market research firm Forrester, corroborates that Amazon has seen more visits on desktop, app and mobile web. In a statement, Amazon said that it registered faster growth in categories such as mobile phones, home, fashion, kitchen and sports. In the mobile phone category, Amazon had exclusive tie-ups for OnePlus 5, Redmi4 and 4A, and Moto G5, among others, this year.
Flipkart versus Amazon: Battle for dominance
Flipkart and Amazon remain neck-and-neck in the overall battle for dominance. Consumer sentiment and preference show that Amazon is strengthening its hold. On the other hand, Flipkart has not been able to grow as much in this quarter.
According to SimilarWeb, Amazon India’s desktop visits stood at 276 million for the quarter that ended June 30, compared with 167.6 million for Flipkart. For its mobile website, Amazon India recorded 311 million visits during the June quarter, compared with 157 million for Flipkart.
Amazon’s ambitious plans for India
Over the past four years, Amazon has invested aggressively in India, committing to spend $5 billion to grow its business in the country. In June, it had invested $0.26 billion (Rs1,680 crore) in its Indian unit as part of this commitment. Amazon has been spending money on building massive warehouses, a large logistics unit, marketing, discounts, and on increasing product assortment in India.
These efforts have undoubtedly translated into a significant lead in key metrics such as app downloads, desktop visits and mobile website visits. The world’s largest online retailer, Amazon, is rapidly gaining in the Indian e-commerce market and may prove to be the ultimate winner in this battle.
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