Flipkart eyeing 70% market share to maintain lead over Amazon

Firm aims to push smartphone sales during festive season; Big Billion Days crucial for achieving target

India's largest e-commerce marketplace Flipkart is looking to extend its lead over rival Amazon during this festive season by targeting a 70 per cent market share in the domestic online shopping space.
 

With a $4-billion war chest, Flipkart is open to burning cash to buy a significant portion of the existing market share and continue its lead over Amazon. The mainstay of Flipkart's strategy is to push the sale of smartphones- a category that has not been providing monetary benefits to the e-commerce firms so far.

"We had set an ambitious market share target of 70 per cent and we should get to around 65 per cent with Flipkart alone and 70 per cent along with Myntra and Jabong," said Smrithi Ravichandran, senior director at Flipkart. "The Big Billion Day offer constitutes a major portion of the monthly target and based on the numbers collected over a period of one-and-a-half days, we are on track to achieve our targeted goals."

Prior to the start of the festive sales, Amazon had claimed that it has already overtaken Flipkart on every metric possible. Both companies have been participating in a war of words, asserting their dominance over the other.

Flipkart claims most of the heavy lifting will be done by the smartphone category in which it aims to capture around 75 per cent of the market share, among online sellers. The category will drive 50 per cent of its overall GMV during the next one month, while supporting accessories and electronics are expected drive another 10 per cent of its overall GMV.

The company had earlier claimed that one out of two smartphones would be sold on its platform during the upcoming festive month. Typically, around 67-70 per cent of smartphones is sold offline, while the remainder is sold online. Analyst Counterpoint notes that Flipkart controls around 50 per cent of the online smartphone market and 15 per cent of the overall market.

Fashion and large appliances will be the other big contributor for Flipkart, with 15 per cent of its GMV being driven by these two categories. While fashion is a smaller segment than smartphones in terms of GMV, the category is expected to drive the maximum number of stock keeping units (SKUs) for Flipkart at 55 per cent.

While Flipkart's aim is to beat Amazon, a third competitor has emerged in the form of Paytm. The Softbank-backed firm has been offering huge cashback on electronics and smartphones and said it saw sales of popular models such as Apple's iPhone and Samsung's Galaxy J3 Pro jump by twelve times over a regular day.

"This is our first festive season sale, and we're happy to share that we have successfully managed to offer the lowest prices on smartphones and laptops in the market. We are enabling millions of customers from semi-urban India to buy electronics at unbeatable prices, and most of these orders are being serviced in less than 24 hours owing to our innovative same-city delivery model," said Amit Sinha, Chief Operating Officer at Paytm Mall, in a statement.