The battle to become the top e-commerce player in the subcontinent is getting more and more intense with announcements from Alibaba of its India entry, which triggered a series of reactions from Amazon and Flipkart. While Amazon has announced additional funding, Flipkart has called back its war veteran to tackle this challenge. While it will take 3-4 months for Alibaba to enter Indian market and another 6-8 months to inspect its impact, there is still going a battle between Amazon and Flipkart; a battle that Flipkart seems to losing at the moment.
Flipkart begin its dream journey in 2007. The e-commerce industry had almost nil penetration and the entire market was up for grabs. The prospects for a new e-commerce company were bright but so were the difficulties. Flipkart had ahead of itself the Brobdingnagian task of getting Indian masses to shop online. It came up with things like Cash on Delivery, Payment by card on delivery which took the Indian market by storm and soon Flipkart was everyone’s Knight in shining armour delivering high quality products at huge discounts at their doorsteps. But soon other players entered the flourishing market and started giving Flipkart a run for money. And then entered Amazon, the big boy that has been the inspiration behind setting up Flipkart. And the fight is on between these two ever since.
But as one takes a closer look at the current rundown, the picture becomes clear. We will take our readers through some of the elemental points towards this conjecture.
Steve Jobs once said “Innovation distinguishes between a leader and follower” and his thought is true in all counts. Flipkart, even though it spearheaded e-commerce culture in India, is still a follower which copied Amazon’s business structure. Even the COD delivery option was already offered by Fabmart.com back in 2001. Amazon has many innovative products of its own like Kindle and its related product which gives it an exclusive edge over pricing of such products.
Flipkart opened its platform to outside seller sometime after Amazon’s entry in India. (letting outsiders to sell on their platform is Amazon’s business structure) But soon complaints started flooding in regarding its seller service. One seller who had applied to sell on Flipkart on October ’14 got a response from the company on May’15 that too to inform them about some complications due to which they cannot let them sell. The same seller had applied to Amazon at same time and had his store up and running. In another new, when Amazon is reducing its commission from sellers, Flipkart has increased its commissions.
The company that Flipkart once was in term of customer satisfaction is nowhere to be found. There is plethora of cases where product sold are fake, damaged or missing some component. Their customer support is lethargic, they don’t seem to have any idea over their social media channels and keep asking time to resolve an issue that is not resolved. Amazon on the other hand treat it’s with utmost sincerity.
Amazon is a gargantuan company as compared to Flipkart with business across many countries. It can easily outshine Flipkart in spending and investing. Amazon’s net worth is $63 billion as compared to $11 billion of Flipkart; more than 5 times. Its India business is already closing in fast on Flipkart and it may become India’s largest online retailer in the coming 12 months.
With all this being said, Flipkart still has the advantages at many places but it should not take those for granted. A happy customer is always good for the company and if Flipkart fails to deliver than it will surely pay the price of it.