India’s largest domestic e-commerce company is trailing Amazon on its home turf.
As of April 2018, Amazon’s share of the Indian e-commerce market had shrunk to 44%, down from around 50% at the start of the year. Despite the decline, Amazon still retained a slight edge over Flipkart’s 40%.
“Amazon India has been quietly expanding its footprint through diversified offerings that encompass multiple services, providing consumers with lower prices at higher scale,” Brian Chaitoff, director of insights at New York-based market research firm 7Park Data, told Quartz.
Its annual membership scheme, Amazon Prime, which includes two-day delivery, video streaming, music streaming, and more for just Rs999 ($15), has won over large segments of price-sensitive Indian consumers. Amazon also leads in terms of monthly active users (MAU). In April 2018, the Jeff Bezos-led company’s MAU growth rate stood at 40%—Flipkart’s was at 30%.
“Part of the app usage growth is related to the entry of Indian mobile operator, Reliance Jio, and data price wars that lowered data costs, driving a higher value proposition for Amazon Prime Video to Prime members,” Chaitoff said.
Among video-watching Indians, who spent around 93% of their stream-time on local-language content, Amazon’s loaded library is a hit. Earlier this year, the Seattle-based firm debuted in India’s music-streaming market, once again boasting of a vast catalogue.
Given its successes, Amazon’s bullishness about the Indian e-tail sector does not come as a surprise.
“Internet penetration in India is still relatively low compared to developed countries, which creates long-term opportunities for Amazon,” Chaitoff said. “A country with over a billion population and a growing middle class is exactly where Amazon needs to focus in order to maintain its global momentum.”
But the verdict on its rivalry with Flipkart isn’t out yet, since Amazon’s homegrown rival is closing the gap, according to this data. At the start of 2018, the US firm claimed 50% of the market share while the Indian company had a mere 33%. Four months on, there’s only a four-percentage-point difference between the two. Flipkart is reportedly trumping Amazon in crucial segments like mobile phones and apparel and fashion, other research has found.
There is little that separates the two competitors, depending on what data you look at. On one hand, some surveys show consumers searching for Amazon more often than they do for Flipkart, thinking the American e-tailer offers a better shopping experience. Others show them trusting Flipkart more.