Flipkart vs Amazon: Similar but very different!

Every festive season, big e-comm brands like 亚马逊 and Flipkart have mega offers to bolster their sales and drive traffic to their website. But do we really understand how these brands compete against each other, compete with physical stores, and how they acquire customers?

Although Amazon and Flipkart are very similar when it comes to how they procure products across various categories to how they fulfil their orders. They are completely different when it comes to the execution of their individual business models. Amazon has its own retail unit that sells products through the platform (i.e. AmazonBasics). They sell a wide range of products across all categories. Flipkart on the other hand, works off a model that does not hold its own or its seller’s inventory.

In terms of competition, Amazon has a far bigger pocket to burn and enough money to spend on customer acquisition. Recently as an initiative to reduce costs, Amazon started using Indian railways to deliver parcels. This not only helped cut down the cost but also made Amazon one of the first new-age logistics players to send parcels through railways.

As with any new initiative, there are teething issues. There was a video circulating a couple of weeks ago of people throwing parcels out of a train and they came under a lot of flak for that. We also must understand that Amazon getting into the hinterland of India and deep diving into the district networks is a game-changer. Flipkart on the other hand is taking a different direction. There was recent news about how they are charging INR 50 from people who regularly return products. By doing this, Flipkart is trying to solve the return-rate problem and discouraging users from frequently returning items.

By taking such initiatives, both companies are not only trying to deepen their network but also trying to figure out which customer base they would largely like to capture. Other than competing for customers these companies also compete on their product catalogue, different vendors, etc. These companies are also trying to get the right customer base in terms of their pricing power, purchasing power as well as behaviour.

Out of all the things that these companies compete for, vendor selection/vendor filtering is the most important one. The companies want vendors who they can rely on and always choose vendors who have healthy finances.

Tomorrow, if the vendor cannot invest in their inventory and not grow the manpower by themselves to service a giant like Amazon or Flipkart then that would be a problem. So, vendor selection and filtering are crucial when it comes to competition between the e-comm giants.

When it comes to discounting, both companies follow a similar strategy like inflating the prices of products and providing steep discounts on the same.

Today, some of the largest categories like electronics or electronic appliances, smartphones, tablets, headphones, earphones, etc really move and hence are discounted the most.

When you compare the discounting in physical outlet stores like Croma or Vijay Sales (in Maharashtra) to these e-comm giants, it is way cheaper. If we speak about discounting on Amazon vs. Flipkart, there is a marginal difference now. We must understand that price is not the only deciding factor. If the price difference is 2%-3% between the e-comm platforms, people will not mind and will purchase from either Flipkart or Amazon. The consumer nowadays only cares if he’s getting the right product, safe packaging and on time delivery.

The customer acquisition model also differs when it comes to these platforms. Amazon’s customer acquisition model is to use all the features in the Amazon network.?So, Amazon will create content, do logistics and do four or five other things to acquire that perfect customer. Flipkart’s way of acquisition is very simple and straightforward. Since 76% of Flipkart is owned by Walmart, they seem to have a better handle on sourcing and have a wider catalogue of goods, not forgetting the years of experience that comes with tying up with a brand like Walmart.

It's amazing how two similar mega e-comm brands that have a common goal have so many uncommon things between them.?