Bengaluru: After its record Big Billion Days sale, e-commerce giant Flipkart will face stiffer competition from arch-rival Amazon India, which has lined up more sale events in this month to keep up the interest it saw from shoppers in the first week of its own sale event.
Amazon will hold at least two more sale events following the first leg of its Great Indian Festival event that ended last week, two people familiar with the matter said on condition of anonymity.
Unlike earlier years, Flipkart and Amazon will go head-on in multiple sale events this time. For Amazon, which had overtaken Flipkart (standalone) in gross sales for two months in July and August, the motive behind the increased aggression is to keep up the pace it set this year.
Flipkart, on the other hand, needs to prove it can compete consistently with Amazon, which has outdone its local rival on product assortment, low prices and fast product delivery for much of the past one year.
Amazon India chief Amit Agarwal didn’t comment on specific sale events but said there will be “multiple pockets during the month that we celebrate”.
“There will be targeted offers that will be coming out through the month, which is what we did last year for 30 days,” Agarwal said in an interview.
Last week, Flipkart outsold Amazon India during the first sale event of the all-important festive season, recording unit sales of 15.5 million compared with 15 million units for the US-based online retailing giant. Flipkart Internet Pvt. Ltd generated gross sales of at least Rs3,000 crore during the five-day Big Billion Days sale, higher than those at Amazon India.
Flipkart offered significantly lower prices on iPhones and other smartphones, TV brands and other high-value products compared with Amazon. On the other hand, Amazon sold a wider range of items, including many low-value products, in an attempt to draw new users to its platform.
Flipkart’s performance signalled a sort of comeback. After spending months recovering from a disastrous 2015, Flipkart’s chief executive Binny Bansal and business and advertising head Kalyan Krishnamurthy had bet the house on Big Billion Days to revive sales growth and win back market share from Amazon.
The festival season sale events are still far from over.
The two people cited above said Amazon will take a relook at its pricing tactics for the remaining sale events this month.
“In the first week, Amazon underestimated the kind of deals that Flipkart had, particularly on electronics. These days, after the FDI (foreign direct investment) laws, it’s also not that easy to react instantly to competition and cut prices. Earlier, Amazon would’ve just given more discounts after looking at Flipkart’s deals. But that’s more difficult now. So, for the next sale events, they will be better prepared,” one of them said.
Flipkart, too, will hold more sale events this month.
“What we’re going to be doing is to be relevant to all our consumers across the month,” said Sandeep Karwa, head of large appliances and furniture at Flipkart. “And hence, there will be offerings, there will be deals across the month. The pricing would be aggressive. The last 10 days of this month are going to be the Diwali shopping days. So, we are hoping to do some good numbers then.”
Amazon will add more firepower in its arsenal by launching video content on its Prime service later this year. The company is betting that it can lure millions of Indian shoppers by offering movies and other video content and then sell books, smartphones and many other products.
The war of words between Flipkart’s Bansal and Amazon’s Agarwal that erupted over the past few days highlights just what’s at stake: the future of e-commerce not in terms of its popularity (which is undisputed) but insofar as which company is best positioned to dominate India’s online shopping market.
That’s why Flipkart is already planning to hit the market later this year for a fresh round of funds, which it will need if it is to keep up with Amazon’s aggressive expansion in the last big, unconquered e-commerce market in the world.