In October 2019, Amazon and Flipkart did a business of $4.3 billion due to the festive season in the country. Durga Puja, Dushera, Diwali, in October the Indians remain in a shopping spree. These eCommerce platforms can witness a steady hike in sales. The average value of orders of the homegrown eCommerce giant stood at Rs 1,976, while the value is Rs 1,461 for the American giant Amazon. Amazon performed better in terms of Net Promoter Score (NPS), whereas Flipkart dominated the gross sales with 64% market share.
In terms of gross units shipped, there is a thin line between these two giants; Flipkart’s share is 56%, while Amazon is at 44%. According to a report published by Economic Times in 2019, “Better availability and variety of electronics and fashion items improved NPS for Amazon, while Flipkart led on the back of strong performance in smaller cities, RedSeer’s client report indicated. Customer cancellations were also lower on Amazon, but Flipkart’s reach and brand recall in smaller towns and cities were better, said the report”.
The festive season is beneficial for these etailers as the users are more open towards spending and investing in the high-value purchase. Merchandise like electronic appliances, gadgets, accessories and apparels skyrocket in terms of sales, helping these companies to reach and even exceed their targets. It is evident that the eCommerce sectors can grab the attention of the consumers where the retail sectors and large format stores do not exist that is the rural and semi-urban areas.
Both the companies can create new user base by penetrating deeper in the Indian economy and also serve the high-value consumers of the metro cities and urban areas. Be it tier I or II or III, the eCommerce sectors have reached everywhere, thus maintaining a diverse user base. As the tagline of Amazon rightly mentions “Apna Dukan”. Anyone and everyone can say that it is their favourite shopping spot. Anyone can fulfil their retail therapy in these sites, irrespective of gender, age and socioeconomic status.
The number of transactions per user was greater in Amazon as they originated from the metro cities. While the gross sales or the Gross Merchandise Value (GMV) was led by Flipkart whose users hailed from the tier I and II cities. Both these giants have their technique which is quite similar, Flipkart’s Big Billion Days and Amazon’s Great Indian Festival. As of 2019, both these eCommerce companies performed well. Flipkart reached due to its reach in tier I and II cities, and Amazon due to its penetration in metro cities, Prime membership and high-value customers.
About Flipkart’s performance in Big Billon Days, it can be said that it achieved a 50% growth as compared to 2018. More than 50% of users are from tier I cities, and there is a 100% year on year growth in this segment. In Big Billion Days 2019, Flipkart’s EMIs, Flipkart Pay Later and Cardless credit increased by 70%. There is also an increase of 2.5% in the adoption of the product exchanged. Amazon’s Great Indian Festival 2019 started at the same time with Flipkart. The lucrative product discounts, combo offers, additional discounts with SBI cards, Amazon Pay cashback, convenient EMI options, return and exchange policies, cash on delivery features dragged the users towards its site. 50% of the Prime members ordered within the first two days of the sales. They received the product along with required installations within 48 hours. Their sale of the fashion apparels and accessories witnessed a 5X growth, smartphone sales by 15X, and large electronic appliances by 8X. Both of them scored well in the season of the Festive Sales with a sharp growth of 65%, year on year basis.
According to Business Insider Intelligence, Flipkart has set a plan of expansion and hoped to reach $14.9 billion by 2023. Since 2018, Flipkart has online grocery platform after acquired by Walmart. Flipkart also introduced Hagglebot, which helps the consumers to bargain during voice shopping. Flipkart is also revamping its tech teams to reach its target and enhance the user-friendly experience. Amazon has added Indian languages on the site, launched other visual aids for a more convenient shopping experience, and working hard to convince more Indian users to shop online.
Both these eCommerce platforms are well acquainted with the price-sensitive user base of the country. With their innovative techniques and efficient business models, both of these companies are all set to dominate the market in the years to come. Another homegrown etailer’s site, Snapdeal needs a special mention here. It has failed initially, but then pulled itself up and now targeting to the tier II and III cities.
While both these companies are operating on the same platform and targeting the same users, both of them are quite favourite of the Indian users. Amazon Prime launched the online site where the Amazon prime members can watch their favourite movies and series anytime, and in many languages. The Prime members are given special preferences such as discounts and delivery options. Both Amazon and Flipkart entered the Indian market in this closing decade. Though Flipkart failed initially to attract the users, it modified the marketing strategies and became successful. In both these platforms, sellers can register easily for selling their products online and increase their business.
In case you are wondering from where to shop, you can actually have a look at both. Compare yourself and then buy it. This is the option we have nowadays. Download both the apps, check-in both and then make a sound decision. Prior to the era of eCommerce, we used to hop from one shop to another and select one. Nowadays, we can do the same thing sitting at home, through our smartphones.