Jeff Bezos optimistic about Amazon in India despite Flipkart
Amazon Founder and CEO Jeff Bezos is optimistic about India despite the growing strength and number of competitors.
As consolidation in Indian e-commerce takes the next step with market leader Flipkart's impending acquisition of Snapdeal, its biggest rival Amazon is vehement about its rising prominence in the country.
According to TechCrunch, Jeff Bezos, Founder-CEO of the Seattle-based titan, yesterday said:
“Our India team is moving fast and delivering for customers and sellers. The team has increased Prime selection by 75 percent since launching the programme nine months ago, increased fulfilment capacity for sellers by 26 percent already this year, announced 18 Indian original TV series, and just last week introduced a Fire TV Stick optimised for Indian customers with integrated voice search in English and Hindi."
However, Flipkart continues to have the upper hand, with reports suggesting that its GMV was $4-6 billion during the last fiscal year, whereas Amazon’s was around $3.2 billion. In fact, a report by the Economic Times has quoted Flipkart COO Nitin Seth saying that the GMV of the Flipkart Group—which combines Flipkart, Myntra, Jabong, Ekart, and Phonepe—has risen by more than 45 percent in March. The report has also stated that Amazon’s average daily shipments stand at around 4.5 lakh items whereas Flipkart's are five lakh.
The Flipkart-Myntra-Jabong alliance holds 70 percent market share in the fashion category, which has high margins compared to electronics and appliances. Amazon has been bullish about FMCG, despite its lower margins. Recently, Flipkart also announced its entry into the category over the next few months. To fight Flipkart’s digital payment arm PhonePe, Amazon India recently managed to receive RBI approval to launch its wallet service in India.
Amazon’s $3-billion investment in India last year was widely seen as a blow to Flipkart—possibly its only competitor in the country, as Snapdeal's numbers have only been falling. However, Flipkart is close to getting SoftBank on board (with the acquisition of Snapdeal), besides having raised $1.4 billion from Microsoft, Tencent, and eBay as well as acquiring eBay India recently.
A recent report by RedSeer Consulting has found Flipkart and Amazon neck to neck in terms of brand recall and NPS. While Flipkart is now focusing on profitability, Bezos’ company is still planning extensive growth. Globally, they have been doing well, with the recent acquisition of Souq, the market leader in e-commerce in Dubai. Amazon has also generated a revenue of $35.71 billion globally this year.
With Amazon’s biggest rival—China-based e-commerce mammoth Alibaba—reportedly set to enter the India market, the US-based company’s fight in the subcontinent will only get fiercer.