Flipkart emerges to be the market leader once again
Flipkart has once again proved its position as the market leader in the Indian online retail industry, as according to estimates, the company outsold Amazon in the festive month of October. Flipkart has successfully proved that India’s largest home-grown start-up can hold its own against a global retail and technology powerhouse in one of the most expensive market share battles of recent times.
Its internal estimates show it sold more high-value products while spending less on marketing and logistics compared to Amazon, as a month-long bonanza of festival sales sharpens the rivalry and triggers a war of words between the two combatants. Flipkart, with its focus on selling fashion apparel, large appliances and smartphones, is said to have sold 70-80% more than Amazon (India) by value in the festive month of October although it "sold fewer units" compared with the American company. These numbers also include sales by its subsidiaries Myntra and Jabong.
The difference in sales between the two e-commerce majors was the result of Flipkart focusing on maximizing sales value, and hence on high value categories like smartphones, TV & large appliances, and apparel & shoes. Flipkart sold 10-times more air conditioners this October than in a regular month, 12 times more refrigerators, and 8-times more televisions.
Flipkart is said to have generated six times more sales this year than it did in October 2014, when the company launched its annual shopping festival, Big Billion Days (BBD). Though flipkart officially declined to provide exact numbers but two people familiar with the matter said on condition of anonymity that Flipkart (including its fashion units Myntra and Jabong) generated gross sales of more than Rs.5, 000 crore in October. A third person familiar with Amazon India’s numbers said on condition of anonymity that the company’s gross sales in October were Rs.4, 000-4,500 crore.
Gross sales are net of discounts but before product cancellations and returns, which tend to jump during sale events.
Flipkart's strategy during the festive month was to focus on the large appliances, smartphones and fashion, and "not to sell units or visits," unlike Amazon India that prioritized by selling more of FMCG products like juices, biscuits and hing (asafetida).
However, selling FMCG products will be a priority for Flipkart as well in the next few months. According to reports, Flipkart is planning to launch FMCG in a different way in the coming months.
Whether Flipkart can hold off Amazon over the long term is to be seen.
Most analysts say that Amazon’s superior spending power and its lightning-fast expansion in India, among other things, gives it the edge, but Flipkart’s performance in October has erased doubts about its ability to take on the US retailer, at least for now.