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With Flipkart and Amazon claiming market share leadership after the annual e-commerce festival season sale on November 5, the next five years could see the giants fight out a discount-led battle for market share.
“As per Kantar IMRB’s empanelled survey of 50,000 online consumers in over 300 cities, more than half of the shoppers in India chose to buy on Amazon.in, making it the preferred online shopping destination, ” according to Amit Agarwal, Senior Vice President and Country Head, Amazon India.
“About 70,000 of Amazon’s four lakh-plus sellers received at least one customer order, customers from 99.3 per cent pin codes placed orders, while over 80 per cent are repeat customers,” he told BusinessLine .
Senior Director at Flipkart, Smrithi Ravichandran said that Flipkart managed to retain leadership position with 70 per cent market share with clear leadership in mobiles, fashion and large appliances. “We have doubled our BBD numbers and surpassed 1.3 billion visits to Flipkart during the festival season sale. Forty per cent of Flipkart’s annual customers shopped during this time and 51 per cent of our customers came from Tier 2 plus cities,” she said.
“Flipkart and Amazon will continue to dole out deep discounts until one of them decides that they want to start making money. This will prompt the other to use the opportunity to push up prices too,” said K Vaitheeswaran, a pioneer of Indian e-commerce industry.
‘Last Man Standing’
“Amazon could have followed the ‘Last Man Standing’ strategy by continuing to sell at a loss, but with retail giant Walmart backing Flipkart, this strategy won’t work as Walmart has equally deep pockets to sustain the discount war,” said Vaitheeswaran, who wrote the best-selling book, Failing to Succeed— The Story of India’s First E-Commerce Company.
Faisal Kawoosa, founder and principal analyst of the research firm, techARC said the neighbourhood ‘kirana’ store enjoys much more loyalty and a stable business than e-commerce firms where customer loyalties shift based on discounts.
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