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India’s fight for e-commerce: Flipkart and Amazon compete for record festive sales

But this year is especially important as the world is recovering from economic downturn caused by the coronavirus pandemic. Millions of Indian customers are still wary of venturing into physical stores, and Meena expects online sales to grow more than 34% to $ 6.5 billion this year.

“This is the time when consumers are actually in consumption mode,” he said, adding that it is about a month of sales period is expected to account for 18% of India’s total online shopping by 2020. “Therefore, all companies want to win the battle in the festive period.”

Flipkart’s competitive advantage in high season

Flipkart was India̵
7;s largest single online retailer in 2018 with a 31.9% market share, according to the latest report from Forrester. Walmart bought the homemade company for $ 16 billion in 2018.

Flipkart’s seasonal shopping event, Big Billion Days, started on Friday.

The company has built its strategy around selling affordable goods to the huge number of middle class and lower middle class online shoppers in India’s smaller towns, according to Rajneesh Kumar, Flipkarts Senior Vice President and Chief Corporate Affairs Officer.

“A significant … number of people in India are looking for value for money,” Kumar said. “If you provide the right value and the right customer experience, you win.”

But Amazon (AMZN) is a formidable competitor. The company was just behind Flipkart with a 31.2% market share in the Forrester report and has developed a strong reputation in the country.

Last year, the US company was ranked as India’s most trusted online retailer in an annual survey conducted by TRA. The market research firm reported that ten times as many respondents said they trusted Amazon than they did Flipkart, which came in second place.

“Flipkart and Amazon are neck-to-neck in the e-commerce wars in terms of their product offerings, their initiatives to boost affordability and increase consumer confidence, and most importantly, their last-mile delivery initiatives,” said Prabhu Ram, head of Industry Intelligence Group in research firm CMR.

Forrester’s Meena accepted, noting that “no clear winner has arrived” yet.

Flipkart has hired 70,000 seasonal workers to handle the festive sales rate.

But he added that when it comes to festive sales, Flipkart has “an advantage in terms of the amount of money customers spend.”

This is because Flipkart dominates online fashion sales, Meena said, adding that the company has strong affiliations with smartphone brands to offer big discounts.

The importance of Diwali

Flipkart and Amazon both faced huge problems delivering orders across the country earlier this year when cities were locked down to fight Covid-19.

Since then, they have been working to improve their supply chains – especially before Christmas.

Amazon opened a new warehouse in Bangalore this month to handle the rise in holiday orders, hiring 100,000 seasonal workers – 10,000 more than last year. Flipkart said it hired 70,000 additional warehouse and delivery workers to handle the rush, an increase of 20,000 people over 2019.

Both companies have also translated their platforms into multiple languages, which they say will help they reach more customers in smaller towns and rural areas.

“We have set ourselves really strong up for the high season,” said Minari Shah, director of PR at Amazon India. Amazon’s major Indian festival kicks off Saturday, but members of its Prime subscription program have access to deals a day earlier.

Like Flipkart, Amazon refused to talk about past or expected festive sales figures, but Shah noted that “undoubtedly, [the holiday season is] a very important part of our calendar. ”

Like the US retail events Black Friday and Cyber ​​Monday, India’s online shoppers are loading virtual carts in advance as they wait for sales to start. Retailers typically offer deals on fashion, smartphones and consumer electronics as well as holiday staples such as candles. , candles and other decorations.

The Indian jewelry brand pulls advertisements with interfaith couples after setbacks

“Since I need to buy a few gadgets, I feel like I can wait a few weeks until the sale starts and get a better deal,” said Anshul Arzare, a banker living in Mumbai.

Arzare said he has seen an increase in online shopping since the pandemic started. In his apartment complex “there is a certain area for birth boys, and at any time you can see a boy from the Amazon there with 20 packages.”

The professional said he prefers to use Amazon.

“The experience has been pretty good, and I have inherently greater confidence in Amazon’s product delivery rather than Flipkart,” he said.

Jio is not a big threat, for now

The festive sales battle takes place as Asia’s richest man plays for the country’s growing e-commerce market. JioMart, part of Mukesh Ambani’s dispersed conglomerate Reliance Industries, made waves earlier this year as it expanded to hundreds of cities across India – a move widely seen as a challenge for Amazon and Flipkart.
JioMart is part of Jio Platforms, which has raised more than $ 20 billion in funding from similar Facebook (FB), Google (GOOG) and the American private equity giant KKR.

“Although it’s quite beginner, JioMart is ambitious and will seek to entice online shoppers with a cocktail of attractive discounts and cashback offers,” said Ram from CMR.

JioMart did not respond to a request for comment on this story. At the moment, it only offers online groceries, leaving Flipkart and Amazon to say it in addition to deals on smartphones, consumer electronics, clothing and household items.

But JioMart plans to get into the fight soon.

“In addition to groceries, we are expanding JioMart to include electronics, fashion, pharmaceuticals and healthcare in the coming days,” Ambani said at Reliance Industries’ annual meeting in July.

Mukesh Ambani's JioMart expands to 200 Indian cities in challenge to Amazon and Flipkart

Flipkart said it welcomes more competition.

Growth in India’s e-commerce industry “requires so much investment in the field to build the supply chain,” Kumar said. “More players are good because more and more investment is going to build that supply chain.”

Whether it’s Flipkart, JioMart or another e-commerce player, Shah said Amazon is not trying to get caught up in what rivals are doing.

“We see them, but we are always more focused and occupied by our customers than by the competition,” she said.

The competition will only intensify. E-commerce accounts for only 5% of India’s total gross goods, according to an August report from consulting firm McKinsey.

But now, due to the pandemic, “the digital economy in India is in a hurry to pick up speed,” Ram said, adding that companies are also picking up new consumers when rural comes online.

“Some of the trends we see this year will be here to stay,” he said. “I do not see a return to the way we were.”

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