Flipkart, which saw their valuation being cut down 4th time by Morgan Stanley last year, is slowly but gradually making a comeback. As per latest sales data coming in, Flipkart has beaten Amazon India in terms of total online sales by a massive margin of Rs 300 crore, for the period December, 20016-January, 2017.
And the catalyst for this major transformation has been smartphone sales.
Flipkart Again Overtakes Amazon India
For the two month period of December-January, Flipkart clocked sales of Rs 2600 crore, compared to Amazon India’s sales of Rs 2300 crore. This achievement comes at a time when Flipkart was condemned for handing over the reins to VC-backed management, as the founders withdrew from the decision-making process.
If we add up sales of Myntra and Jabong, then the difference between Amazon India and Flipkart increased even further. Gross sales are considered as the total sales volume after removing the returns.
After Morgan Stanley downgraded their valuation 4 times last year, another US-based investment firm, Vanguard Group, had also cut down their valuation by 33%. Both are investors in Flipkart, and the recent results which helped them beat Amazon India should pump up their spirits.
In November, we had reported that Flipkart has claimed victory over Amazon during the peak festive day sales. It seems that the good work done by Flipkart team has been carried forward to the months of December and January as well.
Flipkart has played down the euphoria as they issued a statement: “As a policy, we do not comment on sale numbers. However, as a market leader, we continue to grow the e-commerce market in India through India-centric innovations and by continuously improving customer experience.”
Smartphones Sales: The Catalyst of Flipkart’s Victory
As per analysts, massive increase in online sales of smartphones on Flipkart’s platform proved to be the catalyst for their victory against Amazon India.
Smartphones constitute roughly 50% of all online sales in India (and on Flipkart’s portal), and ever since Kalyan Krishnamurthy took over as the new CEO of Flipkart, their focus has been on encouraging more smartphones sales.
Earlier too, smartphones were the largest component of Flipkart’s overall sales volume and Xiaomi, Motorola’s exclusive contract with Flipkart helped me a lot. In between, both of these brands shifted their alliance to Amazon, which hampered their balance sheet.
However, Krishnamurthy’s strategies are now working like a charm it seems. Besides smartphones, Flipkart has been aggressively promoting big-budget products like home appliances as well.
$15 billion e-commerce market is now excited with the possibilities which 2017 shall bring, especially after Flipkart’s amazing victory.
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Yay! This is good news – Indians are buying Indian!! This cash should give Flipkart the ammo it needs to venture into the Really Sexy Stuff – when are we going to see the 1st Flipkart drone delivery? :)