Since their inception, Amazon and Flipkart have always been at cutthroat competition in India. Before we determine which is better in India, let us take few factors into consideration.For starters, both have witnessed amazing sales, offered attractive discounts & various “dhamaka” offers, and implemented other business tactics to appear better than one another.
Over the past year, it has been evident that these are the only two players holding the highest positions in the eCommerce industry. Smaller players such as Jabong and Myntra have been bought by Flipkart. Moreover, Snapdeal is nowhere nearly as big as these two eCommerce giants.There are other eCommerce players taking up the third space, however, the difference between them and these two giants is miles apart. Hence, it can be safely concluded that Amazon vs Flipkart are by far leaders in the eCommerce sector.Here are some of the fundamental differences in the growth strategies adopted by both players:
Flipkart & Amazon are entering the offline shopping space Both companies are foraying into other business areas in India. They aim to capture the offline market, as offline shopping seems to be an area that is untapped by major players.As Flipkart is owned by Walmart, they have the best chance of expanding in the offline shopping market as compared to players such as Reliance and Amazon. Even stores such as Reliance and Big Bazaar, cities and towns are still being dominated by local stores that have a chain of shops around a particular city.A dominant and undisputed player is yet to emerge in the offline market. As both Flipkart and Amazon have earned customer trust and have a sizable customer base in the online market, people are already assured of their brand value.
Hence, they can easily expand into other business areas and have a better chance of succeeding in them.In July 2019, Flipkart launched a brick-and-mortar furniture store in Bangalore that showcases furniture from various brands. Back in 2019, Flipkart thought establishing its foothold as a leader in the furniture market is a good option as it would give the company a chance to control the home products market. At that time, furniture was one of the fastest-growing categories in the online market.
Even Swedish giant IKEA had entered India in 2019 by establishing its first furniture store in Hyderabad, with plans to open more in Mumbai, Bangalore, and other major cities. Along with Furniture stores, Flipkart also announced its plans to open a chain of grocery stores.On the other hand, Amazon, together with Samara Capital, acquired ‘More,’ a good and grocery retail chain from the Aditya Birla Group in September 2018. The deal was valued at Rs. 4,200 crore, and it helped the Aditya Birla Group recover from its Rs.4,000-crore debt. In 2017, Amazon also acquired a 5% stake in Shopper’s Stop, which was valued at Rs. 180 crore.
The algorithm wars Amazon has designed an algorithm that is similar to Google’s. Have you ever wondered why certain products show up on your homepage more prominently as compared to others? These can also sometimes be of unknown brands in categories such as electronics, skin care, fashion, consumer goods, and others.Amazon.in is very serious about getting you to shop more, and not just to advertise the goods available on the platform.
The Amazon algorithm studies your search pattern as well as your past purchases and determines what products you are likely to be interested in more as compared to others.The Amazon algorithm also determines which brands/sellers rank higher based on sales, their cataloguing, and certain other factors. This enables the platform to recognize the availability of the brand. The best part is that sellers have control over promotions. This is similar to the Google model, where sellers can purchase keywords. However, that alone doesn’t necessarily put them on the top of the page. The algorithm determines that on the basis of page ranking. Apart from keywords, this depends upon the availability of the products, sales, and few other factors.Thus we can see that Amazon has a strong backend that enables it to manage scalability more efficiently.
On the other hand, Filpkart’s algorithm is more inclined toward relevant keyword search. Search results are not attached to the success of the vendor.The Flipkart algorithm focuses more on offering products with the lowest possible price first, instead of a combination of its historic sales and customer reviews. This proves to be a blessing in disguise for vendors/sellers, because all they have to do is present the best catelogue. Also, Flipkart doesn’t enable vendors to manage their own page, which is structured and hence, limited Market sources are of the opinion that Flipkart must bring in more functionalities in its algorithm to stay ahead in the game and improve customer as well as vendor retention.
Online video streaming: Prime Video & Flipkart Video Flipkart rolled out Flipkart Video in 2019 to compete against Prime Video. It is a video streaming service similar to Amazon Prime, and is a part of the platform’s loyalty program Flipkart Plus. What’s more, it also announced plans to collaborate with Bollywood A-listers, such as Farah Khan, for the production of original series.
However, unlike Prime Video, which comes free with an Amazon Prime subscription that costs Rs.999 per year, Flipkart Plus is free of cost for customers who make regular purchases on the platform. All users need is 50 coins (like points) to avail Flipkart Video. Flipkart users earn coins with each purchase they make. For users to earn 50 coins, their total number of purchases should amount to around Rs. 12,500.
In short, Flipkart Plus offers the following benefits:
1) Free delivery to Flipkart Plus members of more than 3 crore products.
2) Members get notified about sales conducted on the platform before other users.
3) Flipkart Plus coins are redeemable on other platforms too, such as Zomato, Hotstar, Cafe Coffee Day, and Make My Trip.
Amazon also offers the first two services, however, Flipkart Plus coins sets Flipkart apart. On the other hand, Prime Video has a much larger video library of series, movies, and documentaries from different genres, in different languages, and from different parts of th world. Flipkart Video being relatively new is yet to catch up.To conclude, both giants are in neck-to-neck competition to maintain their market position in India, all other eCommerce players being far behind. Hence, it remains to be seen which of these two giants will actually dominate the Indian eCommerce market. For more such updates on technology & business, do visit the blog section of our website.