India’s e-commerce battle: Flipkart and Amazon compete for document festive gross sales

India’s e-commerce battle: Flipkart and Amazon compete for document festive gross sales

However this yr is especially vital because the world reels from financial fallout attributable to the coronavirus pandemic. Hundreds of thousands of Indian consumers are nonetheless cautious of venturing into bodily shops, and Meena expects on-line gross sales to develop greater than 34% to $6.5 billion this yr.

“That is the time when shoppers are literally in spending mode,” he mentioned, including that the roughly one-month gross sales interval is anticipated to account for 18% of India’s whole on-line purchasing for 2020. “That is why each firm needs to win the battle in the course of the festive interval.”

Flipkart’s aggressive edge in the course of the festive season

Flipkart was India’s single-largest on-line retailer in 2018 with 31.9% market share, in line with the latest report from Forrester. Walmart purchased the homegrown firm for $16 billion in 2018.

Flipkart’s seasonal purchasing occasion, Huge Billion Days, kicked off on Friday.

The corporate has constructed its technique round promoting inexpensive items to the massive variety of center and decrease center class internet buyers in India’s smaller cities, in line with Rajneesh Kumar, Flipkart’s senior vice chairman and chief company affairs officer.

“A major … variety of folks in India search for worth for cash,” Kumar mentioned. “If you happen to present the correct worth and the correct buyer expertise, you’ll win.”

However Amazon (AMZN) is a formidable competitor. The corporate was simply behind Flipkart with 31.2% market share within the Forrester report, and has developed a robust status within the nation.

Final yr, the US agency was ranked as India’s most trusted on-line retailer in an annual survey performed by TRA. The market analysis agency reported that 10 occasions as many respondents mentioned they trusted Amazon than they did Flipkart, which got here second.

“Flipkart and Amazon are neck-to-neck within the e-commerce wars, when it comes to their product choices, their initiatives to bolster affordability and enhance shopper confidence, and most significantly, their last-mile supply initiatives,” mentioned Prabhu Ram, head of the Trade Intelligence Group at analysis agency CMR.

Forrester’s Meena agreed, noting that “no clear winner” has but emerged.

Flipkart has hired 70,000 seasonal workers to handle the festive sales rush.

However he added that in relation to festive gross sales, Flipkart has “an edge when it comes to the amount of cash prospects spend.”

That is as a result of Flipkart dominates on-line vogue gross sales, Meena mentioned, including that the corporate has sturdy tie-ups with smartphone manufacturers to supply massive reductions.

The significance of Diwali

Flipkart and Amazon every confronted monumental problem delivering orders throughout the nation earlier this yr as cities had been locked right down to fight Covid-19.

Since then, they’ve labored to enhance their provide chains — particularly forward of the festive season.

Amazon opened a brand new warehouse in Bangalore this month to deal with the spike in vacation orders and employed 100,000 seasonal employees — 10,000 greater than final yr. Flipkart mentioned it employed 70,000 further warehouse and supply employees to deal with the frenzy, a 20,000-person enhance over 2019.

Each corporations have additionally translated their platforms into extra languages, which they are saying will assist them attain extra consumers in smaller cities and rural areas.

“We’ve got equipped actually strongly for the festive season,” mentioned Minari Shah, director of public relations at Amazon India. Amazon’s Nice Indian Competition begins on Saturday, however members of its Prime subscription program have entry to offers a day earlier.

Like Flipkart, Amazon declined to speak about previous or projected festive gross sales figures, however Shah famous that “undoubtedly, [the holiday season is] an important a part of our calendar.”

Just like the US retail occasions Black Friday and Cyber Monday, India’s internet buyers are loading up digital carts forward of time as they await gross sales to kick in. Retailers usually supply offers on vogue, smartphones and shopper electronics, in addition to vacation staples like candles, lights and different decorations.

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“Since I would like to purchase a few devices, I really feel that I can await a few weeks till the sale begins and get a greater deal,” mentioned Anshul Arzare, a banker who lives in Mumbai.

Arzare mentioned he has seen a spike in on-line purchasing because the pandemic began. In his residence complicated, “there is a designated space for supply boys, and at any given time you may see an Amazon boy there with 20 packages.”

The skilled mentioned he prefers utilizing Amazon.

“The expertise has been fairly good and I intrinsically have extra confidence in Amazon’s product supply relatively than Flipkart,” he mentioned.

Jio will not be a serious risk, for now

The festive gross sales battle is happening as Asia’s richest man makes a play for the nation’s rising e-commerce market. JioMart, which is a part of Mukesh Ambani’s sprawling conglomerate Reliance Industries, made waves earlier this yr when it expanded to a whole lot of cities throughout India — a transfer extensively seen as a problem to Amazon and Flipkart.
JioMart is a part of Jio Platforms, which has raked in additional than $20 billion in funding from the likes of Fb (FB), Google (GOOG) and US non-public fairness large KKR.

“Although it’s pretty nascent, JioMart is bold, and with a cocktail of engaging reductions and cashback affords, will search to entice internet buyers,” mentioned Ram, of CMR.

JioMart didn’t reply to a request for remark for this story. For now, it is just providing on-line groceries, leaving Flipkart and Amazon to duke it out over offers on smartphones, shopper electronics, clothes and households objects.

However JioMart plans to enter the fray quickly.

“Along with grocery, we are going to increase JioMart to cowl electronics, vogue, pharmaceutical and healthcare within the days forward,” Ambani mentioned at Reliance Industries’ annual assembly in July.

Mukesh Ambani's JioMart expands to 200 Indian cities in challenge to Amazon and Flipkart

Flipkart mentioned it welcomes extra competitors.

Rising India’s e-commerce business “requires a lot funding on the bottom to construct provide chain,” Kumar mentioned. “Extra gamers are good as a result of an increasing number of funding will come to construct that offer chain.”

Whether or not it’s Flipkart, JioMart or another e-commerce participant, Shah mentioned Amazon tries to not get caught up in what rivals are as much as.

“We watch them, however we’re at all times extra centered and obsessive about our prospects than with the competitors,” she mentioned.

The competitors will solely intensify. E-commerce gross sales account for simply 5% of India’s whole gross merchandise worth, in line with an August report from consulting agency McKinsey.

However now, due to the pandemic, “the digital economic system in India is within the throes of taking off,” mentioned Ram, including that corporations are additionally selecting up new shoppers as rural elements of the nation come on-line.

“A few of the traits that we see this yr can be right here to remain,” he mentioned. “I don’t see a return to the way in which we had been.”

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