Amazon claims 1.5 times faster growth than Flipkart in GST era

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BENGALURU: Flipkart and Amazon India said their e-commerce businesses grew strongly in the three months that ended in September, registering a significant recovery in the months before the government introduced the goods and services tax.

Flipkart said that its e-commerce business grew around 85% year-on-year in terms of gross merchandise volume (GMV) in the July-September quarter, which included its main festive sales events, an increase of 65-70% in the last three months.

Amazon India said it posted year-on-year growth of 72% in terms of gross sales (GMS) for the September quarter, compared to a 59% growth in April-June.

Flipkart investor Naspers, however, in a recent report has said that the company grew 43% year-on-year in the six months from April to September, giving ammunition to Amazon India to claim faster growth than its biggest national rival in 66% for the six-month period.

“The report (Naspers) actually refers to the January-June period and … it has a three-month lag, so the comparison is not similar or relevant,” said Flipkart CFO Sriram Venkataraman. “Flipkart continues to outperform the industry and our growth accelerated significantly during the July-September quarter in the aftermath of a very strong holiday season.We saw an 80% growth for (the September quarter) in all categories, with GST having a positive impact, “said Venkataraman.

However, an Amazon India executive insisted that the India unit of the global ecommerce giant was “growing much faster than the market and grew 1.5 times more than Flipkart” between April and September.

The executive, who did not want to be identified, also said that Amazon acquired more customers this year than the previous year. “The cost per unit of acquisition (of the client) is decreasing, our expansion letter continues in India and we will continue in the investment phase in India, either creating new services or improving technology, we are focused on the same parameters as the year past: customer growth and geographic distribution, “said the Amazon India executive.

Flipkart’s GMV metric is a proxy for gross sales and does not include discounts or product returns. The Amazon GMS also excludes discounts, but takes into account the performance of the product.

India’s e-commerce industry grew to 40-42% in the three months ending in September and is expected to grow 50% in the current quarter from October to December, according to Satish Meena, senior forecast analyst at Forrester Research.

In the July-September quarter, the impact of the tax on goods and services (GST) came into effect and ended on a high note for the e-commerce industry with the main sales event of the Amazon Grand Festival of Amazon and the Big event Billion Days of Flipkart that will take place earlier this year.

“The third quarter could have seen more growth, but due to the fact that there were many previous sales to GST in June,” Meena said. “However, growth in the fourth quarter is expected to be very good compared to last year, as the fourth quarter of 2016 was affected by demonetization.”

Amazon India, which organized its first Prime Day sale in July, said its sale of the Great Indian Festival this year included high-value items such as mobile phones and large appliances that sold more. The smartphone category is linked to a 42% growth this year, according to industry estimates. Analysts said that while Flipkart leads in terms of market share in the category, the gap with Amazon India was narrowing. In the June quarter, Flipkart’s share in the smartphone category fell to 50% from 57% in the March quarter, while Amazon India’s share rose to 33% from 27% in the same period , according to Counterpoint Technology, based in Hong Kong. Market research.