Founded in the year 1994 Jef Bezos, amazon is the Facebook of E-commerce and even more! Started as online book retailer, today it is the largest online store. As well stated by their logo they literally sell everything from A to Z!
Talking about Flipkart, it is in true sense the torchbearer for Indian e-commerce sector. Registered in Singapore (yes, Singapore!), even this online store launched itself as a bookseller just to turn into an all products e-commerce marketplace!
Amazon launched in India six years after Flipkart and still has managed to acquire a formidable and enviable position in the Indian market.
Let’s talk about the Flipkart’s Big Billion Sale. It ran into needless problems and was mercilessly ambushed by competitors, so much so that it resulted in its founders having to tender an apology for the several glitches its customers faced during the sale. Actually Flipkart seemed to be distracted by its competitor, Amazon.
Its e-book business has been around for a little over two years, but is not clear how much traction they have in the market. With the launch of Amazon Kindle in India, Flipkart saw it being squeezed even more. The history of the e-book market is not a happy tale – if you are not Amazon or the customer.
Flipkart recently has suffered on a lot of accounts majorly, the reorganization issues coupled with exit of a few top executives and its decision to go app only for Myntra. Despite this, it has not slowed down its expansion plans and acquired Jabong recently and backed its decisions by saying that the fashion segment of e-commerce has the largest transaction volume. Amazon on the other hand, has been equally active in the sense that it has enhanced its investment in India and also launched the Amazon Prime facility across 100 cities.
Amazon has an edge over Flipkart in terms of fulfillment centers too — 24 to 18.
In the last few months Amazon has surpassed Flipkart to become the largest online retailer in the country. More than anything else, the race in the online retail world has been to be the fastest by eliminating friction from the buying process to accelerate and enable buying decisions. Flipkart may well be the incumbent and the player to beat in the Indian market, but, Amazon has with itself the treasure of two decades of experience- experience of emerging out of dire situations and circumstances very similar to the ones created in Indian market. Also, the list of successes for Amazon has been more than that of its failures. If Flipkart distracted by every move of its strong and influential counterpart, it might make some very wrong decisions and eventually land itself into a trouble that can prove to be fatal.
There is one way which Flipkart can adopt to become as strong as Amazon and that is a merger with Snapdeal. As reported by The Mint,” The two e-commerce companies are burning through cash and it doesn’t look like the flames of competition are going to die down while they’re being fanned by that 800-pound American gorilla called Amazon and its $15.9 billion war chest.”
However, such changes alone are unlikely to bring a turnaround on their own. Both the startups are going to need more cash, arranging which can be a bit hectic as investors might be hesitant to do so under the shadow of Amazon, which has already committed to $5 billion to its Indian operations and has more to spare.
Bloomberg reports, “Instead, investors, including venture capital firms Accel, Bessemer, DST and Tiger Global, should seek to broker a merger that could cool the fight with Amazon and bring the duo back to the business of making money. Even then, turning a profit in India won’t be a snap but it would be the best deal for all.’