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

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

October 16, 2020 Off By administrator

But this year is particularly important as the world reels from economic fallout caused by the coronavirus pandemic. Millions of Indian shoppers 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 spending mode,” he said, adding that the roughly one-month sales period is expected to account for 18% of India’s total online shopping for 2020. “That’s why every company wants to win the battle during the festive period.”

Flipkart’s competitive edge during the festive season

Flipkart was India’s single-largest online retailer in 2018 with 31.9% market share, according to the most recent report from Forrester. Walmart bought the homegrown company for $16 billion in 2018.

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

The company has built its strategy around selling affordable goods to the huge number of middle and lower middle class online shoppers in India’s smaller cities, according to Rajneesh Kumar, Flipkart’s senior vice president and chief corporate affairs officer.

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

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

Last year, the US firm was ranked as India’s most trusted online retailer in an annual survey conducted by TRA. The market research firm reported that 10 times as many respondents said they trusted Amazon than they did Flipkart, which came second.

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

Forrester’s Meena agreed, noting that “no clear winner” has yet emerged.

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

That’s because Flipkart dominates online fashion sales, Meena said, adding that the company has strong tie-ups with smartphone brands to offer big discounts.

The importance of Diwali

Flipkart and Amazon each faced enormous difficulty delivering orders across the country earlier this year as cities were locked down to combat Covid-19.

Since then, they have worked to improve their supply chains — especially ahead of the festive season.

Amazon opened a new warehouse in Bangalore this month to handle the spike in holiday orders and hired 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, a 20,000-person increase over 2019.

Both companies have also…

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