Saturday, March 6, 2021

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A Whooping $7 Billion On-Stake In India As Amazon Takes On Walmart-Owned Flipkart

India’s most popular festival Diwali brings with it an opportunity for the biggest E-commerce retailers Walmart owned Flipkart and Amazon that host their biggest shopping events: Big Billion Days and the Great Indian Festival respectively.

The Diwali season allows these e-commerce giants to make massive sales by attracting consumers by giving deep discounts on its products. However, with the ongoing coronavirus pandemic this year, the e-commerce industry faced troubles during the lockdown. But the retailers worked through it for the upcoming sale season and improved their supply chains.

Last year, Amazon India and Flipkart announced the creation of 1.4 lakh temporary jobs and in May this year, Amazon India had created close to 70,000 seasonal opportunities across its operational network and customer service centres, reported PTI.

“This, along with today’s announcement, is another step forward in Amazon India’s commitment to create one million new job opportunities in India by 2025 through continued investments in technology, infrastructure, and its logistics network,” it said.

Amazon India also announced setting up of 10 new warehouses expand 7 existing centres across the country this year. The company now has more than 32 million cubic feet of storage capacity and supports more than 6.5 lakh sellers across regions, reported PTI.

The PTI report, citing a RedSeer report, estimated that about three lakh jobs are expected to be created by various e-commerce and logistics companies during this year’s festive season.

According to another RedSeer report, the festive sale this year, it estimated, would double this year touching USD7 billion in gross merchandise value (GMV) as compared to USD 3.8 billion in the same period last year.

One reason that could be behind the increase in sale is that some people are still scared to leave their homes because of the risk of infection and prefer online mode of shopping. 

Manoj Gairola, a New Delhi-based telecom sector analyst talking to Nikkei Asia said: “People have lost jobs as businesses suffered because of COVID-19, and the country’s growth witnessed a historical decline.” 

India’s GDP saw a sharp decline in the April-June quarter, a 23.9% year-on-year contraction. “In the past, consumers had been spending enthusiastically during the festive season as the working class used to receive Diwali bonus from their employers, which is not the case this time,” Gairola said.

According to Forrester Research, an American market research company, Flipkart had 31.9% market share, making it the largest online retailer in India. On the other hand, Amazon India isn’t far behind with a 31.2% market share. 

“Flipkart and Amazon are neck-to-neck in the e-commerce wars, in terms of their product offerings, their initiatives to bolster affordability and increase consumer confidence, and most importantly, their last-mile delivery initiatives,” said Prabhu Ram, head of the Industry Intelligence Group at research firm CMR, talking to CNN.

While Flipkart may have a larger market share, Amazon enjoys the most desired internet brand in the country, according to a Trust Research Advisory (TRA). 

Satish Meena, senior forecast analyst with market research firm Forrester told CNN that “no clear winner” has yet emerged, adding that Flipkart has “an edge in terms of the amount of money customers spend. That’s because Flipkart dominates online fashion sales and the company has strong tie-ups with smartphone brands to offer big discounts.”

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