Diwali sales prove Flipkart can hold its own against Amazon: Binny Bansal
Bengaluru: Flipkart chief executive Binny Bansal said the company’s performance in the key month of October, when it outsold arch-rival Amazon India, proves 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.
Bansal said Flipkart 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). He 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 Rs5,000 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 Rs4,000-4,500 crore.
Gross sales are net of discounts but before product cancellations and returns, which tend to jump during sale events.
“One thing that is heartening in the wide lead established by Flipkart (in October) is that a home-grown company can successfully fend off a 22-year-old global behemoth (Amazon) pouring in money to buy market share. This is very important as it’s a question on everyone’s mind today, especially on the minds of entrepreneurs: how will we take on global giants if they come into India? The answer is that you can. You need to do it with the right customer focus, local innovation and local knowledge. And that would always win against just pure capital,” Bansal said over the phone.
He added that according to Flipkart’s estimates, the company outsold Amazon in October.
“We do not comment on speculation or rumours, nor comment on any sales or revenue numbers... We track customer-focused metrics from reputed and independent third-party industry sources like Similarweb, AppAnnie and ComScore and believe we are leaders in all relevant metrics,” said an Amazon spokeswoman in response to a query on Flipkart’s claim of generating higher sales in October.
On Monday, Amazon India head Amit Agarwal said sales in October jumped 2.7 times from last year.
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.