MUMBAI | BENGALURU: The top two Indian ecommerce players will battle it out over smartphones this festive season with leader Flipkart targeting four times the sale clocked by the competition and Amazon aiming to cross its annual growth rate of more than 100% in this category during its month-long sale.
“We expect one out of every two customers buying a smartphone in India to be from the Flipkart site during the sale,” said Ayyappan Rajagopal, senior director, mobiles, at Flipkart. Flipkart’s The Big Billion Days sale is from September 20-24 and rival Amazon is expected to announce its dates soon but will also target the festive period. Sales for both will continue during this month long festive period.
Arun Srinivasan, director, smartphones and consumer electronics for Amazon India, said his company has more than doubled its selection of exclusive smartphones across price segments. Giving an indication of expected demand during its upcoming sale, Amazon said it had recorded a five-fold jump in smartphone sales this July during its 30 hour Prime Day sale.
Both have plans to lure in customers by rolling out EMI options, variations of cashbacks and exchange offers. This aggressive stance was expected, with Flipkart pulling out all stops to maintain its lead in the online market for smartphone and Amazon snapping at its heels.
Counterpoint Research for April-June said Flipkart had 50% share of the online smartphone market, down from 57%, Amazon’s share had increased to 33% from 27%.
But Flipkart disputed this number, saying that it has increased market share in terms of gross sales, claiming it has increased from 60% in Q1 to 67% in Q2. Counterpoint data is based on total shipments that come into the platform’s channels from brands and sellers.
Counterpoint said the push by both the etailers would grow the online market in third quarter as promotions will be strong ahead of the festive season.
“However, having said that, major online brands are also now expanding offline and favouring multichannel strategy,” said a spokesperson for the research house.
Both will hope efforts push sales of smartphones from online platforms, which have hovered around 33% of overall retail sales in the past year, as the price differential with offline nearly disappeared with ecommerce players cutting back discounts.
Smartphones were among the first electronic devices to be sold online and remain among the highest selling segments for ecommerce majors.
Smartphones contributed close to 25% of overall GMV (gross merchandise value) of the ecommerce sales through 2016 and is expected to remain at similar levels in 2017, analysts say, highlighting the criticality of the segment to the ecommerce majors.
Flipkart has dropped its starting range of smartphones on discounts and offers to Rs 3,500 from last year’s Rs 6,999 to get a larger chunk of buyers who can also pay EMIs on purchases via debit cards. It will mainly target buyers in the Rs 5,000-20,000 range, compared to last year’s Rs 7,000-15,000.
Flipkart has installed a software in their app which informs the customer about the price he will get for his handset.
This helps in exchanges since 90% of customers buying smartphones from the site are upgrading their devices and therefore do not have to depend on shopkeepers to get quotations. Amazon is yet to roll out details of its offers. The fight for non-metros will continue.
Amazon said it has seen a growth of more than 300% in tier I, 450% in tier II and 600% in tier III markets respectively in one year. It says it will fulfil orders at one- or two-day delivery while Flipkart said bulk of its smartphones will be delivered to metros and tier I in three days.
Flipkart has also decided to drop the price of buyback policy from Rs 399 to Rs 99 during these 30 days. If a customer picks up a buy-back policy when he purchases a phone, it guarantees him a minimum amount of return when he wants to sell it for another handset.