Flipkart, Amazon most preferred; Paytm sees sharp rise in popularity

The third RedSeer E-tailing Leadership Index shows Flipkart leading the e-commerce rankings but Amazon India has closed the gap

Amazon had the highest net promoter score, a metric for customer satisfaction, among its top-tier peers. Photo: Pradeep Gaur/Mint
Amazon had the highest net promoter score, a metric for customer satisfaction, among its top-tier peers. Photo: Pradeep Gaur/Mint

Bengaluru: Online marketplace Flipkart remained India’s most popular e-commerce platform in the three months to October, just nudging ahead of arch- rival Amazon India, which has spent hundreds of millions of dollars to build loyalty with Indian shoppers, according to the third version of the RedSeer E-tailing Leadership Index (ELI). Paytm, a digital payments and commerce platform, is also making its mark as a strong Internet brand, mostly on the back of its digital wallet.

Flipkart continues to lead the e-commerce rankings with a total score of 97, improving its score of 95 from the previous quarter, the third ELI showed. Flipkart’s score got a boost partly because of an increase in marketing spending, customer anticipation of its flagship sales event Big Billion Days and a significant improvement in time taken to deliver orders.

Amazon India, though, is snapping at Flipkart’s heels. Amazon has closed the gap and significantly improved its score to 95, up from its previous score of 87—highlighting the significant ramp-up in the performance of its India business under Amit Agarwal, who in a November interview said Amazon would spare no expense to conquer the all-important Internet market in India and would continue pumping significant investments into the country over the next 5-10 years.

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“India is very early in its e-commerce trajectory. Amazon is very early in its e-commerce trajectory in India. To transform how India buys is going to take a long time; it will take a lot of investment and... for many years. This is just the beginning,” Agarwal said in an interview on 1 November.

Amazon’s numbers were helped mainly by higher marketing spending, which resulted in greater brand recall and the highest net promoter score (NPS)—a metric that indicates customer satisfaction—among its top-tier peers. Amazon’s performance over the past few months has also been buoyed significantly by the launch of its global customer loyalty programme Amazon Prime in India, which according to the company has been its highest selling product over the past two months.

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The index, which is published on a quarterly basis in Mint, is compiled by research and advisory firm RedSeer Management Consulting, which specializes in e-commerce market research. RedSeer surveyed some 6,000 online shoppers in 30 cities, tracking prices of more than 600 mobile phones across India’s top six e-commerce firms. The third ELI measures the performance of these firms for August-October. It considers three broad metrics: trust in a brand; product assortment and prices; and the overall buying experience in terms of ease of using the e-commerce platform, delivery speed/consistency of orders and ease of product returns or cancellations. It does not reflect sales performance or losses.

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According to the latest version of the index, other e-commerce and Internet start-ups such as Snapdeal and Paytm also improved on their previous scores—their latest scores stood at 74 and 75, respectively. ShopClues and eBay’s scores came in at 58 and 56, respectively—roughly the same as in the previous quarter.

The third ELI indicated that Paytm put in the most improved performance among all e-tailers, with significant gains in overall experience and a marginal increase in NPS.

The e-commerce industry as a whole has significantly improved its NPS scores over the past six months or so, helped particularly by the efforts of Flipkart to get back to its customer service standards of old, and by Snapdeal to fix its delivery times. According to the ELI report, in the three months to October, online retail clocked an NPS of 25% compared with 17% in the July quarter.

The flip side of that growth, however, is that e-commerce companies are now struggling to keep up with heightened customer expectations. In short, e-commerce companies spoilt customers and are now facing an increasing list of demands apart from just low prices. So, while the October quarter NPS score of 25% is higher than that of the April quarter, it’s lower than the 29% clocked by online retailers in May-July.

Experts tracking Indian e-commerce say that top companies are yet to put in place the infrastructure that ensures one-day deliveries—as is increasingly becoming the new normal due to programmes such as Amazon Prime—to customers on a daily basis consistently.

In the third ELI, all top e-commerce firms scored high on pretty much all the main metrics, such as customer satisfaction, delivery times and brand recall, and had few glaring weaknesses. According to the ELI report, the likes of Flipkart improved on an already strong position, gaining on metrics such as brand recall and delivery timelines.

Amazon improved on similar metrics and registered the highest NPS among top e-commerce businesses, while Paytm emerged as the most improved e-tailer on all metrics. Snapdeal, which launched a rebranding campaign during the quarter as part of a broader effort to connect better with consumers, posted a high October score as well, but was unable to service demand effectively during the festive season, according to the report.

“We are humbled by the tremendous and growing customer trust in Amazon. In as in just three years, customers believe in us to find, discover and buy anything. This got showcased strongly during the sale events in October with customers in over 97% of serviceable pin codes in India ordering everything from mobiles, TVs, large appliances to home décor, furniture, sports equipment and everyday essentials, and choosing to pay for the convenience of Prime offering unlimited free next-day guaranteed delivery,” said an Amazon India spokeswoman.

“This festive season marked the inflection point for e-commerce in India. In an industry reportedly flat or negative, Amazon India continued to show remarkable growth of 135% YoY. We are humbled by this remarkable customer response and are proud to lead the path for the future of what e-commerce should be in a diverse country like India,” she added.

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