Flipkart is e-commerce market leader in India, says Naspers report
Bengaluru: South Africa’s Naspers Ltd, the second-biggest investor in Flipkart, has indicated that the Indian e-commerce poster boy is the market leader in the country’s $15-billion online retail market—a claim that arch-rival Amazon India has disputed.
According to Naspers’ latest annual report, Flipkart’s share of monthly gross merchandise value (GMV) stood at roughly 57% in March, up from 45% in June last year. Naspers’ numbers are based on Flipkart’s estimates.
Amazon disputed Flipkart’s claims of market leadership.
“Based on standardized monthly reports, we know for sure that we are leaders on things that matter to customers and sellers. As there are no credible third-party sources for segment share, we do not comment on speculations. In the last four years since starting our India operations, we have transformed the ecommerce landscape in India through our global and local customer and seller focused innovations to make ecommerce a part of customers’ daily lives and beyond metro phenomenon. With an industry-leading selection of over 100 million products offered by over 2 lakh sellers, loyalty programs like Prime, order delivery to 97% serviceable pin codes in India till date, 75% of new customers coming from non-metro geographies and a significantly faster than industry growth rate of over 85% YoY in Q1 2017, Amazon is shaping the future of ecommerce in India,” an Amazon India spokeswoman said in an email.
Flipkart, which in April raised $1.4 billion in fresh funds from Tencent, Microsoft and eBay, did not immediately respond to an email seeking comment.
While the market share figures cited in the Naspers report are disputed by Amazon, experts agree on one thing: Flipkart has shown clear signs of a turnaround in sales since last June when alarmed investors brought back Tiger Global Management executive Kalyan Krishnamurthy to lead a recovery amid an all-out assault from Amazon India.
Prior to Krishnamurthy’s return, sales had stagnated at Flipkart and during the months of July and August, Amazon India had, in fact, overtaken Flipkart’s monthly sales on a standalone basis.
Flipkart’s recent resurgence has its roots during last year’s Big Billion Day (BBD) sale in October when it trumped Amazon India, belying predictions of many investors and analysts who thought Amazon may run away with India’s $14-15 billion e-commerce market.
Mint first reported on 16 February that Flipkart had pulled in gross sales of more than Rs2,600 crore in both December and January on the back of bumper sales of smartphones, coming in ahead of arch-rival Amazon India in both months.
Flipkart’s numbers during the March quarter and the current quarter are early but clear signs of a sustained turnaround under Krishnamurthy’s stewardship.
While Flipkart has shown signs of consistency over the last nine months, Amazon India has not conceded any ground.
On 7 April, Mint had reported that Amazon India had posted an 85% increase in gross sales volumes in the three months to March from the year-ago period, growing much faster than the overall market and maintaining pressure on Flipkart.
Amazon’s numbers have indicated that its strategy of offering the widest product selection and aggressively advertising its platform is working well. Its subscription programme Prime, which was launched last July, is helping the company retain many existing customers and getting them to spend more. Mint reported first in April that Prime accounts for nearly 30% of all orders on Amazon India.
On Monday, Amazon CEO Jeff Bezos indicated that the company would continue to invest heavily in India, after a meeting with Prime Minister Narendra Modi in the US.
“Terrific meeting with @narendramodi. Always impressed, energized by optimism and invention in India. Excited to keep investing and growing,” Bezos tweeted.