Amazon Prime: Bully to Netflix or Flipkart ?
Amit Kumar Singh
Business Head at India's #1 Real Estate Classifieds Platform - 99acres.com | P&L Ownership | People Leadership
I have been a regular user of Netflix and also that of Amazon Prime for more than 6 months now and for two weeks, I have been enjoying Amazon Prime Videos as well, without extra charges off-course - which makes me happy for some reason –( we are Indians and we want to even save that 10Rs for parking wherever possible, especially if we have a driver "bhaiya - drop karke bahar park kar lena")
Anyway, with Netflix subscription charging 15X (500Rs per month and 650 Rs per month - two SKUs) for a month, Amazon prime video will certainly pull a lot of consumers who were sitting on the edge but found Netflix to be expensive.
However what's going to hurt Netfilx is that their current consumer base (whatever insignificant that they have in India) will migrate to Amazon Prime video. So if Netflix is serious about India, they would be in tremendous pressure to match or better prices than Amazon Prime.
[Note: we are not even talking about content because Amazon Prime Content is far superior to Netflix for Indian consumers, so Netflix should not even think about charging almost 15 times, assuming they will have a play on content]
Now, it is evident that Amazon Prime will be a choice subscription to have for a significant urban consumer base where there is reasonable broadband penetration (which BTW is only 7% for entire country)
One can argue that Netfilx or Amazon Prime videos' total addressable market is limited by broadband penetration in urban India except that with 4G things MAY change.
However, in my personal experience, this is a very big IF, considering 5 out of 10 Amazon products don’t qualify for delivery in a place like Noida.
I had been using 4G services for over more than a year and I am super thrilled to get services which were promised to me in 3G in parts of Noida and if you are using cellular services on-the-go then you struggle for basic voice network connectivity, forget about data speeds.
So hoping to deliver Netflix and Amazon Prime videos on cellular network is still a wishful thinking and I have not even started talking about monthly data expenses.
Cellular companies had been making plans of “superjackpot” growth based on smartphone penetration in India without realizing that Indian consumers wants to buy a smartphone to take photographs (as a substitute to camera) not to use internet services.
Cellular companies are struggling to increase the share of wallet for internet services for smartphone users in India.
Consumers certainly consume a lot of videos on mobile so that is a clear way of mid-long term future for success story but the road to that city is much harder than it looks. With internet services being the backbone for delivery for Netflix and Amazon Prime Videos, I don't presume either of the offering making big until last mile network speed issues are sorted for top 25 cities in India. I hope to find myself with foot in mouth with fibernet penetration rising in urban India though.
So, will Amazon Prime really hurt Flipkart?
It looks that this questions has far too many moving pieces to the puzzle.
IMO, some consumer will certainly adapt to Amazon prime but until the delivery issues of Amazon are sorted and Prime starts to apply to significantly more SKUs available on Amazon, it doesn't appear to even make a dent on Flipkart.
Consumers need perceptible difference in the shopping experience of the two platform to make a preferred choice for any platform, other than discounting off course (remember? we are Indians after all).
As I always maintain, the key to success is core value proposition and not paraphernalia
Please share your thoughts in comments below.
Tech, Data, Digital & Innovation Director - Country CIO | MBA, PMP?, SAFe Agilist, PSPO, CSSGB
6 年Product bundling has been a forte of Amazon and it has used its financial stability, vision and deep engineering expertise to post serious challenge to Flipkart in terms of bang for buck. To add to it, the challenge is taken to new launches on platform, move to Amazon music, connectivity to marketplace -replicating eBay value proposition with assurance of quick customer support and claims processing. Areas where they need to work to stake a solid claim to market leadership is surely of outreach to customer, segment penetration(did the trick with Prime video) and operationally supporting customers in tier 2 and 3 cities as well.
Chief Technology Officer at CARD91 | Driving Innovation | Luxury Photographer, Video Creator
8 年As a user for all the services mentioned here are my 2 cents: 1. Netflix content is far superior to Prime if we ignore regional content for India. Hindi movies that are available in Prime are the ones that are repeatedly playing in your digital TV day in and out though so not too much of a benefit there too 2. Price points are definitely in favour of Prime 3. Prime delivery is better than Flipkart. Even product price points are better.
Amit, as a user in Gurgaon and Bangalore, I can tell you that most of the stuff that I need on Amazon gets covered under Prime, so that's not a concern. I am not on Netflix, but because I get Prime Videos complimentary with my subscription, I have been using those. However, my assumption was that Netflix content would be far superior, something that you as a dual user believe is not the case. Is that the case? Could you throw some more light on that? I do find the content on Prime less than optimal, though it has some shows that I wanted to see, and am hoping that by the time I finish those, Prime Videos would juice up its content. Tell us more about the content part. Also, I do believe prices may become more equitable at some point in future. It's the a matter of time, and given that these are subscription services, there is no reason why people like me won't shuttle between these two platforms (as and when the prices becomes similar)