Nasper, the South African media major, in the recently released market share statistics revealed that India’s largest e-commerce platform, Flipkart has logged 43% growth in their Gross Merchandise Value for the last six months, which ended in September this year, track.in reported.
Naspers is the primary investor in Flipkart. As per the report, Flipkart has seen a significant upward tick in its market share from the year-ago period. Flipkart had a tedious 18-month time warp, where the e-commerce giant, besides facing severe competition from Amazon India, it also had to concede a chunk of its market share. As the saying goes, misfortune never comes in small bundles; Flipkart had to witness the atrocious attrition during this time. Most of its senior executives were either asked to go or quit on their own due to the organizational restructuring. Braving all odds, Flipkart still leads the Indian e-commerce horizon is the highlight of this firm.
Steadying the Market
What with the online apparel firms such as Myntra, Jabong and the payments App, PhonePe (Powered by Yes Bank) and eBay India under its wings, Flipkart has been able to stay afloat in the otherwise turbulent Indian e-commerce marketplace. Added to that is the consistent festive season sales also had helped Flipkart to gain more growth. As per the report, the online major had captured an estimated 70% of the total e-commerce market in India.
The Chinese online major Tencent and the Japanese investment establishment, SoftBank had made significant capital investments in Flipkart. What is more, the e-commerce leader is now consolidating its position as the key B2C platform in the burgeoning online and offline markets in India.
Although there has been claims and counter-claims by both Flipkart and Amazon India over the supremacy of who is leading the show in India. The Jeff Bezos owned Amazon India – an arm of Amazon Seller Services Private Limited – has been persistently claimed that it is ahead of Flipkart minus Myntra and Jabong, in terms of accounting their gross sales – apparently, by gross sales, the reference is about the value of the goods sold through the digital sphere and not the net revenue – and to substantiate its claim, in the first two quarters of this year till June, Amazon had declared that the e-commerce major had logged a unit sale growth of 85% and 88% respectively as against the year ago period.
Stating that there has been a difference in the growth numbers between Amazon and Flipkart, the report went on to add that it was due to the one-time charges. Kalyan Krishnamurthy is the architect of turning around point for Flipkart, who was recalled by the alarmed investors back in June last year after, what the report termed, “a predatory assault” by Amazon India. Furthermore, during the period between August-September 2016, Amazon India had surpassed the sales of Flipkart on a standalone basis. Apparently having realized the fact that Krishnamurthy’s come back had helped the firm improve their sales figures, Flipkart management had elevated him to the position of CEO in January this year.
With the robust growth logged by Flipkart has resulted in augmentation of the value of holdings of Naspers holdings in the e-commerce sector in India. Both in terms of burgeoning sales and robust growth has helped with the classifications and payments, and their revenue has shown a growth an upward surge of 38% on a Year-on-Year basis, and a reasonable growth over the 24% in 2016.
Neck and Neck Growth
In November, both Amazon as well as Flipkart, had an equal standing in the e-commerce space, said the report and added that Amazon still lagged in the festive season sales, and Flipkart’s recent $4 billion funding from SoftBank, Tencent, eBay and Microsoft will eventually help the e-commerce player give Amazon India a tough fight. Amazon, however, had doubled its authorized capital to $4.74 billion (Rs. 31,000 crores) in last three years with an earlier capital commitment of $5 billion made in June last year by Jeff Bezos, added the report.
Flipkart is offering up to 50% off on toys for this gifting season in India including joyful flourishes, festive essentials, Christmas music and movies, gifts for him, gifts for her and Santa’s picks.