The diwali sale is over and Flipkart has announced its victory over Amazon by selling 15.5 million units as compared to Amazon’s 15 million units.
While mobile phones and electronics were the top selling products, FMCGs were also a sought after segment. Poking fun at Amazon, Flipkart’s spokesperson, said last week that while Flipkart sold physical goods, its rival sold virtual membership and low-cost items like candy, detergent, churan (digestive powder), hing (asafoetida) and eggs!
In an interview to the Economic Times published on Monday, Amazon India head Amit Agarwal countered the remark saying, “People not only bought mobile phones, upgrading through an exchange offer or the appliance that they could not get access to in their city or the home appliance or the fashion they were looking to buy but they also bought churan and hing.”
Confident about Amazon being the leader, Agarwal said that during the sale, one out of every three shipment was for Amazon Prime members. He explained that the shift in the buying trend made it evident that subscriptions for Prime has been growing significantly.
“This is complete debunking of the myth that people do not pay for convenience. These are fundamental shifts that the US took 10 years to reach. In the US, Prime was launched in 2005, a decade after Amazon began operations. In India, it took three years,” said Agarwal to Economic Times.
In another interview to Mint on Monday, Agarwal said that he aims to make Amazon a marketplace where buyers come not just to buy phones and electronic goods but anything and everything that they need on a day-to-day basis.
“We’ve grown 135%, on average, year-over-year in every quarter (this calendar year). That compares with flat or negative growth for the overall market and for other players. And we continued that momentum (by recording three times sales growth in the sale week). It’s exciting that in a little over three years, we have done and we’ve led the pack for what e-commerce should be, what others in 10 years and with multiple acquisitions have not come close to doing. I’ll take this any day,” said Agarwal to Mint.
However, Agarwal did not rule out any scope for improvement despite Amazon’s 20-year record in the US. In the same report in Mint, he said, “Every time a package does not reach a customer, every time we are unable to fulfil an item that a customer wants to buy because it is not in stock—these are all defects. These defects will continue for a long, long time. Take a mathematical example, when you have over 15 million units, and let’s say you have 99% accuracy, you will have 150,000 defects. That’s a large number, a lot of customer queries and a lot of customer complaints.”
The rapidly growing online retail industry in India is a result of discounts and free deliveries rather than convenience unlike developed markets. Sales growth for online retailers began slowing this year as the latest guidelines on foreign investment in e-commerce forced companies to cut down on discounting.
“Amazon India was unaffected by curbs on discounting imposed by the foreign direct investment (FDI) guidelines on e-commerce. Clarity is better than ambiguity,” Agarwal told Economic Times.
Ruling out Flipkart’s claims of being the best in the business in India, Agarwal said that the metric followed by its rivals Flipkart and Snapdeal was ‘bogus’. He said that the customers chose Amazon as the default shopping destination and that he is confident of Amazon being the leader in terms of selection, reliability, convenience, price and availability.