Flipkart vs Amazon vs Snapdeal – The Indian Internet War
Morgan Stanley estimates that the Indian internet market will be worth $137 billion by 2020. This is serious money. With the introduction of 4G around the corner, India will soon have fast and cheap internet, just like West. So, more than 200 million Indians are expected to make the jump to the internet bandwagon over the next four years.
So what does this mean for the warriors of Indian e-commerce – Amazon, Flipkart and Snapdeal? Here’s a prediction from us – Flipkart vs Amazon vs Snapdeal contest which everyone has been talking about, will only get nastier and more brutal, with one company emerging in the end as the undisputed champion if Indian e-commerce. Who will that be?
In the 1990’s, we had the software boom in India. Everybody back then was obsessed with the contest between Infosys, Wipro and TCS. That contest has been decided – TCS has come out on top, but now the software industry has become so boring that nobody really talks about it anymore.
The attention is squarely on India’s internet economy – on the likes of Flipkart, Amazon and Snapdeal. There’s also a lot of attention on smaller players such as Paytm, Zivame, Yebhi, Infibeam, OLX and Quickr. Surprisingly, one company that had a head start, eBay, is nowhere to be found in the race, largely because of inefficient management and poor branding.
2016 should be a year that will make or break these companies. The stakes have only become higher. A lot of money is being put into to industry by venture capitalists and private equity. Flipkart was able to get a financing of $1 billion in 2015, but Amazon quickly followed with a financing of $2 billion from CEO Jeff Bezos. Flipkart has bought Myntra, a promising played.
Snapdeal signed up superstar Aamir Khan as a celebrity endorser, paying him several crore rupees. Everybody thought that it was a great move, till the actor took a political stand, accusing Indians of being intolerant, which led to a mass boycott of Snapdeal by the Indian people in reaction. So Snapdeal, unfortunately, had to suffer for no fault of theirs, but that’s the way it is in the cutthroat world of Indian eCommerce.
Flipkart has made certain management changes, with Binny Bansal replacing Sachin Bansal as the CEO of the company. Flipkart knows the intense competition it faces from Amazon in particular. Flipkart is still the #1 player in Indian e-commerce, but that may not be for long, given how fast Amazon India has been growing.
Amazon India’s sales are expected to be Rs. 6000 crores by March, 2016. But Flipkart is still ahead, with sales of Rs. 50,000 crores in 2015. Snapdeal is ahead of Amazon as well, registering Rs. 18,000 crores in sales in 2015. The game is on, and Flipkart has set new, ambitious targets, such as having 100 million regular customers by 2018 – which would make it the third-biggest e-commerce company in the world after Alibaba and Amazon.
For Amazon, India is the most important market after the U.S. Amazon failed to take off in China because of failing to understand the culture, couldn’t handle the complex regulations and also because the competition from the likes of Alibaba was too great. India is another story. The Indian government welcomes foreign investment in India, so here, Amazon feels at home, unlike in China. Amazon India has made a name for itself already as a reliable and trustworthy online retailer in India. Amazon India knows it cannot afford to lose in India as it did in China, as Jeff Bezos, Amazon’s founder and chief executive, hates nothing more than losing.
The next 5 years are going to be an exciting time for the e-commerce sector in India. It may a brutal fight to the end for the major players in the industry, but for the Indian consumer, it’s good news all-around. Today, the Indian consumer more choices than ever before and can seek out the cheapest products on all online platforms.
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