By Nishant Sharma
India’s largest e-commerce firm Flipkart is making a second attempt at a customer loyalty programme to take on Amazon’s Prime subscription service that contributes more than a third of the retail giant’s gross sales in the country.
Flipkart Plus, which goes live on Aug. 15, will be free, it said in a statement. Amazon charges its Prime subscribers a monthly and annual fees and bundles in all offerings under one roof.
Flipkart, which agreed to sell a majority stake to Walmart Inc in May, will instead offer digital currency, called Plus Coins, that customers will earn on every purchase. The coins can be redeemed to join the programme, helping customers get more discounts, early access to sale events, and free and faster product delivery. Besides, they can also be used on platforms like Hotstar, Zomato, and MakeMyTrip, among others.
Amazon Prime, launched in 2016, accounts for 35 percent of all orders on Amazon India, increasing its market share in India. It helped the Seattle-based giant beat Flipkart in user experience, Redseer consulting had said in its November report.
Flipkart didn’t disclose details of the criteria for customers to earn loyalty points, and also the value of the Plus Coins. This is its second attempt at a loyalty programme, after it briefly experimented with ‘Flipkart First’ in 2014. The service fizzled out due to poor response from customers.
It’s doubtful that Flipkart will be able to ensure stickiness on the platform with its new programme and be a competition to Amazon Prime, according to Satish Meena, analyst at New Delhi-based Forrester Research India Pvt. Ltd.
This is a very basic programme and looks similar to the points programme offered by credit card companies or miles programmes by airlines.
–Satish Meena, Analyst, Forrester Research India
The model will further lead to discounting and will not help the company to earn anything out of it, the way Amazon earns, he added. “It is to be seen how it exactly plays out when Flipkart launches the program. They will have to offer much more to ensure stickiness.”
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