Amazon trying hard, but still plays second fiddle to Flipkart

Amazon may have to try harder to place itself in the coveted ace position, reports Tech in Asia

Looks like Flipkart’s tantrums over demanding preferential treatment for homegrown start-ups against global players like Amazon are ill-founded.

According to the quarterly Indian E-tailing Leadership Index, Amazon still plays second fiddle to Flipkart, which has been ranked number one for the fourth straight quarter in 2016.

Other gainers

In the three months ending December, however, the biggest gainer in popularity was not Flipkart or Amazon.

It was Paytm. The digital wallet smartly promoted its product riding on the government’s demonetisation move.

While Paytm gained from the phasing out of high-value notes, e-commerce players suffered a setback as a cash crunch crippled cash-on-delivery payment, which accounts for a significant chunk of their business.

But the real tug-of-war is between Flipkart and Amazon.

Amazon inching closer?

In early 2016, Amazon was having a dream run.

Flipkart was simultaneously plagued by frequent management changes, investors pressurising them to reduce cash burn, and a sales slowdown. Amazon managed to take the second position in January, toppling Snapdeal, and has remained there since.

Amazon’s mild performance in China against Alibaba means it’s crucial for the e-commerce giant to make it big in India.

In September, a Bank of America – Merrill Lynch report said that Amazon’s market share based on the total value of goods sold will improve to 37 percent by 2019 from 21 percent in 2015, but still be a close second to Flipkart. Flipkart’s market share in 2019 is expected to be at 44 percent, as per the brokerage firm.

Now that Flipkart investor Tiger Global has brought in Kalyan Krishnamurthy to clean house, the ecommerce player may be in a better position to retain its top spot. Amazon may have to try harder to place itself in the coveted ace position.

This is an excerpt from Tech in Asia. You can read the full article here.