Flipkart grows user base to 100 million

33% growth in past 6 months despite slowing e-commerce biz, stiff competition from Amazon

Flipkart, India’s largest e-commerce marketplace, says it has expanded its consumer base by 33 per cent in the past six months to 100-million registered users, despite stiff competition by global rival Amazon, which has committed a massive $5 billion to capture the India market.

Flipkart says its 100-million registered user milestone represents 63 per cent of all broadband Internet subscribers in the country and that it is the first company to reach this milestone outside the US or China. It had announced breaching the 75-million user milestone in March this year. The figures exclude users of Myntra and Jabong, its fashion units that have a higher proportion of younger users.

In August last year, Alibaba-backed digital payments company Paytm had announced it had crossed the 100-million user mark.

“Since the time we sold the first book to our first customer in 2007 till today, our journey has always been about providing a superior shopping experience to our customers. This milestone has further energised us to ramp up our efforts and build a world-class shopping destination,” said Binny Bansal, co-founder and chief executive officer of Flipkart, in a statement.

This growth in users comes at a time of slower sales in India’s e-commerce market. It is estimated that online sales fell 19 per cent in the January-March 2016 quarter, while sales during the April-June period dropped 5-10 per cent, according to market research firm RedSeer Consulting.

Flipkart says it continues to command leadership in India’s e-commerce market, with a 43 per cent share, citing a Bank of America Merrill Lynch report from September this year.

Amazon, which pledged to invest a further $3 billion into its India business in June this year, has been steadily growing its market share, at the expense of rivals Snapdeal and Flipkart. During June-July this year, Amazon is said to have surpassed Flipkart, in terms of the value of goods sold. Myntra and Jabong, two key sales drivers for Flipkart, were not included in this comparison.

Flipkart’s growth comes at a time when the industry has begun raising red flags about a drop in the pace of new users coming online to shop. This theory is resonant even within Flipkart itself, indicating that the next 25 million users might not come to them as easily as the previous 25 million.

“The market hasn’t grown and that’s way more concerning than how we are doing against Amazon,” digital media company FactorDaily quoted Flipkart’s chief executive Binny Bansal telling employees during a townhall meeting last month.

Lastly, Flipkart does not reveal the total number of monthly active users on its platform. Given the tough competition from Amazon to woo customers, this number could be far lower than the 100-million registered users the company claims. With Amazon pampering existing users with larger discounts and nifty services such as Prime, it’s imperative that Flipkart continues to grow the e-commerce market in India, with new users to maintain its lead.
THE 100-MILLION USER CLUB

Paytm: 125 million; crossed 100 million last August

Hike: 100 million

Facebook: 150 million; crossed 100 million in June 2015

Snapdeal: Has a current user base of 110-million plus, across Snapdeal and Freecharge platform

Source: Bloomberg, companies