Bengaluru: Flipkart Ltd again beat arch-rival Amazon India in the festive season sales battle, underlining its tactical superiority and setting up the e-commerce firm for a strong end to a year in which it turned around its fortunes and secured its status as the country’s largest online retailer.
The festive season period may have also marked a turning point for e-commerce in 2017, as online retail is now set to grow by more than 25% for the full year after a sluggish first-half performance, according to analysts and company executives.
In its five-day Big Billion Days sale that ended on Sunday, Flipkart generated gross sales of more than Rs5,000 crore driven by booming sales of Apple Inc.’s iPhones, Xiaomi phones and VU televisions, according to two people familiar with the matter. Flipkart’s numbers include sales at Myntra and Jabong, its specialty online fashion retail businesses. Amazon India (Amazon Seller Service Pvt. Ltd) generated gross sales of Rs2,500-2,700 crore in its four-day Great Indian Festival sale last week, three other people familiar with the matter said.
Amazon disputed the figures mentioned above. Amazon said it is consistently well ahead of Flipkart on metrics such as app downloads, desktop visits and mobile website visits. According to data from market intelligence firm SimilarWeb, which tracks website traffic, Amazon India’s desktop visits stood at 276 million for the quarter ended 30 June, compared with 167.6 million for Flipkart. For its mobile website, Amazon India recorded 311 million visits during the June quarter, compared with 157 million for Flipkart, according to SimilarWeb. Amazon also said its methodology of calculating gross sales could be different from Flipkart’s. Gross sales refers to the value of goods sold on a platform, not net revenue.
“Amazon.in remains the largest marketplace and the fastest growing one in Indian e-commerce landscape. The recently concluded Great Indian Festival has been our biggest shopping event till date with a remarkable spike in customer acquisition from tier II and tier III cities across India, with 85% of new customers coming from these areas. We saw a tremendous customer response across categories—from high-value products such as smartphones and appliances to everyday essentials such as shampoos, biscuits and pet supplies," Manish Tiwary, vice president (category management) at Amazon India, said in an email through a spokesperson.
Flipkart also disputed the numbers cited above and said its sales were higher, without specifying the exact number. “Big Billion Days (BBD) is India’s biggest shopping festival that has over the years played a pivotal role in expanding the e-commerce market in India. This year’s BBD, we have set new standards by doubling our sales versus last year, stepping up our geographic coverage and vastly increasing the reach of affordability constructs like ‘No cost EMI’ (equated monthly instalment), Product Exchange and Buy Back Guarantee. We believe, that our market share during the BBD event will be more than 70% of the online market," a Flipkart spokesperson said in a statement.
In most months, Amazon India runs neck-and-neck with Flipkart (on a standalone basis). But starting with last year’s BBD sale, Flipkart has been getting the better of its American rival in large sale events. Analysts say that’s because Flipkart is more nimble and tactically astute at such events. While Amazon has a far broader product assortment, Flipkart focuses more on putting together a compelling collection of exclusive brands and products for such sale events. These products are identified months before the event, and Flipkart sales employees are pushed to do everything to secure them on an exclusive basis. During the sale, the company offers attractive prices on many of these products, which are prominently placed on its app and websites. Additionally, in terms of customer perception, it’s clear that India’s key festive season sales period, which is akin to the Black Friday sales in the US, is associated more with Flipkart’s Big Billion Days event compared with the rival sale at Amazon.
For the broader e-commerce market, the festive season sale has brought cheer.
In the first half of 2017, e-commerce expanded at less than 15% over the year-ago period. But after the jump in sales, online retail may expand at more than 25%, analysts and executives said. In 2016, online retail touched $14.5-15 billion, according to RedSeer Management Consulting.
“After the 40% year-over-year increase at the start of the festive period last week, it looks like e-commerce will grow by 25-30% this year. That’s a healthy growth compared with the poor performance last year and the first half of 2017," said Anil Kumar, founder of RedSeer.