Flipkart CEO’s reply to Amazon’s No.1 claim
Flipkart CEO Binny Bansal said the business's income (or gross merchandize value of items sold on the stage) during the festive season was 70-80% higher
Flipkart CEO Binny Bansal said the business's income (or gross merchandize value of items sold on the stage) during the festive season was 70-80% higher than that of Amazon's and that it accomplished this at a third of the costs borne by the latter.
He attributed it to the company's focus on innovation that was local, local knowledge, and the right customer. "The broad lead established by Flipkart demonstrates that the home grown Indian business can successfully fend off a 22-year worldwide behemoth pouring in money to purchase market share," he said.
Bansal told TOI that his figures are based on data from brands and vendors selling on the platforms that were competitive, from logistics businesses, tips from promotion on-line traffic info, and consultancy RedSeer. Asked for its reaction to Bansal's estimates, Amazon sent the following statement: "We usually do not comment on speculation or rumors nor comment on any sales or revenue numbers. As a customer-focused firm, we do not comment on competition, nor believe anyone externally can offer a credible opinion on Amazon's inner sales amounts or any data not in public domain."
It's been reported previously that Flipkart beat Amazon in sales this season, but the extent of the difference between the two has been unclear. If Bansal's estimates are correct, it'll be a huge boost to the business, given that Amazon is spending harshly in India and continues to be seen to be rapidly narrowing the difference with Flipkart. Ference in sales between Amazon and Flipkart was the consequence of Flipkart focusing on maximizing sales value, and thus on high-value groups like smartphones, TV & Appliances that are large, and apparel & shoes. He said the experience of the last two joyful season sales demonstrated these groups also are what customers seek out during this season. Flipkart sold 10-times more air conditioners 8, 12times more refrigerators, and this October than in a routine month -times more televisions. In vogue, Bansal said the Flipkart group (Flipkart Fashion, Myntra, Jabong) together crossed $2.5 billion in sales run rate in October (or about $200 million in the month). He said Flipkart had 75% of double, and the on-line market share in vogue the market share of its nearest challenger in smartphones, and TV & big appliances.
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Amazon appears to have concentrated on selling more units. Its sold item one-third of total shipments during the first week of October was the Prime Membership, a Rs 499 subscription that promises boundless next day free delivery. Two of the other enormous increase drivers were grocery and household consumables, both of which consist mainly of low-value items.
So the difference between both is insignificant when it comes to units. After the Dussehra sale, Flipkart had said it sold 15.5 million units during the sale period, while Amazon said it sold 15 million.
Flipkart's October sales were 6-times higher, and units sold 5-times higher compared to October 2014. A comparison with October 2015 could be misleading because Diwali was in mid-November this past year.
Bansal said where orders would come from the prices that were sharply lower was on account of intelligent marketing and use to understand. "During this season, we figured people are anyhow looking to shop. So we did not need to do excessive advertising. We focused on litter-busting social media efforts that were progressive, and creatives. The brands, he said, bored all reductions.