Amazon Has Surpassed Flipkart As Indian Consumers’ Preferred Online Retail Destination

According to data from Forrester’s Consumer Technographics® Asia Pacific Online Benchmark Survey, 2016, in the past three months Amazon has, for the first time since 2014, surpassed Flipkart as the preferred online retail destination for consumers in India’s metropolitan areas. Amazon’s takeover has been rapid: 30% of respondents in our 2014 survey reported buying from Amazon; this year, 76% said they did. Compare this with Flipkart’s essentially flat growth: from 63% in 2014 to 68% in 2016. Snapdeal remains far behind both Amazon and Flipkart.

This comes on the heels of Amazon surpassing Flipkart and Snapdeal as the most-visited Indian retail site in November 2015; Amazon’s mobile app recently became the most downloaded app in both Google Play and the Apple App Store. Amazon only entered India in June 2013 — years after Flipkart (2007) and Snapdeal (2010) launched — but Amazon made a comittment for $5 billion investment in the Indian online retail market at a time where Flipkart and Snapdeal were facing valuation markdowns and fundraising difficulties. A price war in past few years ensured sales growth — but customer loyalty is difficult to buy. With a slowdown in eCommerce funding leading to reductions in online discounts and online retailers trying to focus more on building infrastructure and improving the customer experience, Amazon has rapidly picked up the pace in the past 12 months to beat the local players in multiple performance indicators. The much-hyped metric of gross merchandise value (GMV), which companies have aggressively pursued in the past few years, has been dropped by both Flipkart and Snapdeal in favor of customer loyalty and net revenue in 2016.

Online retail still accounts for less than 2% of India’s total retail sales, but is growing at rapid rate; we expect it to exceed $75 billion by 2020. However, most of the discounting-led growth was directed toward just 50 million online buyers — a very small percentage of Indian shoppers. In order to keep growing at the same pace, online retailers have to penetrate beyond Tier 1 and Tier 2 cities into smaller cities and villages where customer acquisition will be challenged by multiple issues including lack of internet penetration, payment methods, logistics, and language support.

For more on the Indian online retail market, ForecastView clients can download the Forrester Research Online Retail Forecast, 2015 To 2020 (Asia Pacific).

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Amazon Has Surpassed Flipkart As Indian Consumers’ Preferred

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Even they will not be able to crack India

Flipkart, Amazon, Shopclues, Snapdeal are all targeting urban India. This market is already saturated as Binny Bansal is one of his truthful moments stated. The only growth will come from discounts leading to higher sales. As soon as discounts are discontinued sales will drop.

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