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Amazon nears No. 1 spot in Indian e­com

businesspaper Updated: Jul 22, 2016 18:04 IST

NEW DELHI: The Indian e-commerce landscape is changing. And Amazon, the world’s largest e-tailer, is closing the gap with Flipkart in one of the world’ s fastest-growing internet markets.

If monthly statistics are anything to go by, Amazon India is ahead of Flipkart in almost every parameter — mobile app downloads, visitors on websites, traffic on desktop and mobile sites, warehouses and investment.

It is only in terms of gross merchandise value (GMV) that Flipkart is ahead, and it is just a matter of time before Amazon overtakes it. GMVis the total value of goods sold on a platform, excluding discounts and promotions.

“We are not competition focussed, but customer obsessed,” said Amit Agarwal, country head, Amazon India.

In May, Amazon got 1.92 million downloads, while Flipkart had 1.72 million, according to San Francisco-based a pp intelligence firm App Annie. Amazon has taken the lead since March.

According to California-based analytics provider Alexa, Amazon-India ranks 78, Flipkart ranks 118. Data from London-based analytics provider Similar web shows Amazon’s desktop traffic at 88.5 million, and Flipkart’s at 66.4 million, in May. On mobile site, too, Flip kart was behind (46.8 million ); Amazon got 82.8 million.

In response to HT’s queries, Flipkart said that based on Similar- web’s June data, the retailer’s daily active users on its app are 3.91% of the total active app user base, while for Amazon it is 2.32%. Its marketshare of total e-commerce apps installed is 33.79%, versus Amazon’s 21.31%.

“Flipkart along with Myntra continues to be the clear market leader by far on all relevant parameters ,” a Flipkart spokesperson said.

“We offer over 65 million products ,” said Agarwal. The company adds over 90,000 products per day; has 1.4 million products in stock— the largest selection in India. Its seller base is 100,000 versus Flip kart’ s 90,000.

And Amazon has put in funds to back logistics on ground. Founder Jeff Bezos has announced $5-billion investment in three years. Flipkart has put in $3.2 billion in nine years.

“Local competition needs to innovate if it is competing with a global company. They come with massive process maturity, technology of scale, and a good product. They only need to figure out localisation,” said Sid Talwar, founder of Lightbox Ventures, a venture capital firm.

Amazon has localised for India. To counter low bandwidth and cheap smartphones, it reduced the size of the app. To tackle logistics, it opened 100 warehouses— 22 fulfilment centres owned by Amazon, and 79 owned by sellers. It has partnered with India Post and offers delivery via 155,000 post offices. It has 1.4 million products available for next-day delivery.

Flipkart‘s valuation has been marked down by four mutual fund investors, and the company is struggling to raise funds. Flipkart’s GMV has stagnated at $4 billion, while Amazon’ s moved to $2.7 billion from $1 billion.

And now, Amazon is hitting where it hurts the most – rural India. It is establishing distribution centre sin India’ s hinterland. ”Our success is when we are able to deliver exotic tea or designer wear to a customer residing in the farthest corner,” Agarwal said.

First Published: Jul 22, 2016 08:57 IST