Despite Flipkart’s claims, Amazon proves to be a close competition

Flipkart’s Big Billion Days and Amazon’s Great Indian Festival has come to an end, and now it’s time for the performance review.

In this year’s festival sale both the companies have managed to almost double their sales and GMV (Gross Merchandise Value) as compared to last year. Native Indian Flipkart has garnered around $1-1.1 billion in GMV in the 5-day sale. Last year, the figure stood at $660 million.

According to the company’s claim, the growth in GMV is about 80 per cent and the growth in the number of new customers onboard is approximately 50 per cent as compared to last year. The high GMV of Flipkart was driven by smartphones, large electronics or appliances, as per an ET source.

For Amazon India, the GMV of goods sold during the sale has gone up from $380 million last year to a double of $700-800 million in 6.5 days. As we can see the number is not far behind that of Flipkart.

Amazon claims that they sold more than double the units last year, as well as, saw a threefold increase in the number of prime users. Moreover, the company claims to have acquired 82 per cent of the new customers from smaller towns and cities.

Similar to the GMV, the expenditure of the companies is also expected to almost double as both the companies are likely to spend $300 million each in next few months, where as Flipkart spent $100-150 million last year, and Amazon India $200 million.

On an industry level, the e-tail market has grown by 64 per cent with $2.3 billion worth sales, as compared to a 43 per cent increase with $1.4 billion worth sales in last year.

As far as market share is concerned, Flipkart owns 50 per cent of the Indian market, while Amazon India claims to control 35 per cent. However, the Kalyan Krishnamurthy-led company claims to own 70 per cent market share if it includes Myntra and Jabong in the calculation.

During a recent interview, Amazon's senior vice-president and country head, Amit Agarwal revealed that the company got orders from 99 per cent of serviceable pin-codes in just four days.

On the competition front, Agarwal outlined that there is no publicly available unbiased data that provides market share segment in India and any comment from the company would be a speculation.

Objectively, it can be seen how Krishnamurthy’s claim that there is no number 2 in the market after Flipkart is unfound as Amazon India clearly seems to hold the second position.

Further, it would be interesting to see how this race pans out in the future for at least the two e-commerce giants in India.