Festive sales push up user numbers for Flipkart, Amazon

BENGALURU: Flipkart and Amazon India have recorded significant growth in their customer base during the festive month starting October 10. While homegrown player Flipkart claimed to have doubled its customer base over last year’s festive month, the local unit of US-based Amazon said more than half of Indian online shoppers transacted on its platform.

While Walmart-owned Flipkart claimed to maintain its market share lead of more than 50%, Amazon India head Amit Agarwal cited a Kantar-IMRB report to claim that more than half of online shoppers in India bought on Amazon.in. “We were the most preferred online shopping destination in India. What is exciting this time is that we have had a pan-India impact,” Agarwal said.

Flipkart claimed to win back some of the metro users, an area where Amazon is said to have a stronghold. Meanwhile, Amazon chased the “next 100 million customers” hailing from small towns.

“This year we saw about 49% of our shoppers come from metro and tier-I areas, a jump of four percentage points from last year,” said Smrithi Ravichandran, senior director at Flipkart.

“We were able to win back metro customers due to a wide selection as well.” For Flipkart, its recently launched Flipkart Plus loyalty programme, among other factors, played a role in attracting metro users. While 33% of Flipkart’s customers are Flipkart Plus users, Amazon said its Prime base doubled from last year.

“About 89% of our new customers during the sale period came from small towns,” said Agarwal. “Our investments including the Hindi website, free shipping for first purchase, financing, logistics connectivity to 100% of PIN codes, and more in getting to the next 100 million customers are paying off.”

This year, the sales were touted to be the biggest where both Flipkart and Amazon were expected to clock $2.5-3 billion each during the one-month sale period.

While the companies did not reveal absolute numbers, Flipkart said its gross merchandise value expanded 90% over the sale period last year, Amazon India put the figure for itself at 70%.

Post the first wave of sales, the biggest shopping events for both platforms, consultancy firm RedSeer Management put the market share of Flipkart at 51% and for Amazon at 32%. Amazon did not comment on the market-share figures.

The Diwali festive sales in India hold strong significance for Amazon for its international growth, as was highlighted by the US company during its recent quarterly results. It said the late Diwali this year led to slower growth in the third quarter.

“The growth we have seen in India has been tremendous,” Agarwal said. “Indian ecommerce, however, is still a drop in the ocean compared to Amazon’s global sales,” he added.

For Flipkart, this was the first month of sales after its $16-billion takeover by US retail giant Walmart, making it an important event as Wall Street would be watching the company’s performance closely.