Amazon trying hard, but still a second fiddle to Flipkart

Photo credit:Pixabay.

Looks like Flipkart’s tantrums over demanding preferential treatment for homegrown startups against global players like Amazon are ill-founded.

According to the quarterly Indian E-tailing Leadership Index, Amazon still plays second fiddle to Flipkart, which has been ranked number one for the fourth straight quarter in 2016.

Flipkart retained its top spot with the same score – 97 – as last quarter. Brand recall for Flipkart saw a slight uptick, backed by better product diversity and competitive pricing. But its post-delivery experience – such as refunds and returns – declined, the survey found.

Amazon remains a very close second, with a marginal decline in brand recall. For the quarter ending December, Amazon India conceded some ground to Flipkart, with the retailer losing some points on brand recall and post-delivery experience. Its score came down by two points from the quarter ending September.

See: Amazon is closing in on Flipkart. Jeff Bezos describes how he got there

Other gainers

In the three months ending December, however, the biggest gainer in popularity was not Flipkart or Amazon.

It was Paytm. The digital wallet smartly promoted its product riding on the government’s demonetization move.

The Vijay Shekhar Sharma-led company’s score went up significantly to 82, from 75 in the last quarter.

Amazon may have to try harder to place itself in the coveted ace position.

While Paytm gained from the phasing out of high-value notes, ecommerce players suffered a setback as a cash crunch crippled cash-on-delivery payment, which accounts for a significant chunk of their business.

Snapdeal also improved its scores on the index, benefiting from its partnership with Paytm’s smaller rival Freecharge.

But the real tug of war is between Flipkart and Amazon.

Flipkart cofounders Sachin Bansal and Binny Bansal. Photo credit: LetsIntern.

Amazon inching closer?

In early 2016, Amazon was having a dream run.

Flipkart was simultaneously plagued by frequent management changes, investors pressuring them to reduce cash burn, and a sales slowdown. Amazon managed to take the second position in January, toppling Snapdeal, and has remained there since.

Flipkart’s problems have only multiplied thereafter, with a series of valuation markdowns and an industry-wide funding crunch that prevented the company from raising fresh funds.

Amazon grabbed the opportunity and declared a US$3 billion investment just for the India market, pushing its competitors to the brink of panic. The US giant has already invested over US$2 billion in India.

See: Indian unicorn Flipkart’s top-level exodus snowballs, CFO Sanjay Baweja quits

Amazon’s mild performance in China against Alibaba means it’s crucial for the ecommerce giant to make it big in India. Amazon was a late entrant in the country, coming in years after homegrown rivals Flipkart and Snapdeal. Amazon India has been trying to topple Flipkart by investing loads of money into the venture.

The E-tailing report, released by RedSeer Consulting in July, had estimated that the top five ecommerce companies in India hold about 80 percent of the market. Of that, Flipkart has about 50 percent market share. But that number is shrinking, and Amazon may not be far behind, the firm told Tech in Asia.

In September, a Bank of America – Merrill Lynch report said that Amazon’s market share based on the total value of goods sold will improve to 37 percent by 2019 from 21 percent in 2015, but still be a close second to Flipkart. Flipkart’s market share in 2019 is expected to be at 44 percent, as per the brokerage firm.

Now that Flipkart investor Tiger Global has brought in Kalyan Krishnamurthy to clean house, the ecommerce player may be in a better position to retain its top spot. Amazon may have to try harder to place itself in the coveted ace position.

But Flipkart’s problems are far from over. Recently, its ewallet PhonePe was blocked by ICICI Bank and Airtel over security concerns and allegations of violating fair play. Flipkart, however, has denied receiving any communication from these two companies on the matter, and has asked them to explain the block in detail.

See: Overcoming the China nightmare: why Amazon needs to win in India, ASAP

This post Amazon trying hard, but still a second fiddle to Flipkart appeared first on Tech in Asia.

from Tech in Asia https://www.techinasia.com/flipkart-retains-top-position
via IFTTT