Info-tech

Amazon overtakes Flipkart as most favoured retail destination: Report

Varun Aggarwal Mumbai | Updated on January 17, 2018

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Amazon has, for the first time since 2014, surpassed Flipkart as the preferred online retail destination for consumers in India’s metropolitan areas, according to Forrester’s Consumer Technographics Asia-Pacific Online Benchmark Survey, 2016. 

Amazon’s takeover has been rapid: 30 per cent of respondents in Forrester's 2014 survey reported buying from Amazon; this year, 76 per cent said they did. Compare this with Flipkart’s essentially flat growth: from 63 per cent in 2014 to 68 per cent in 2016. Snapdeal remains far behind both Amazon and Flipkart. 

This follows news from last week that Amazon had surpassed Flipkart to become the most downloaded app on the Google and Apple app stores in the first quarter of this year. 

While online retail still accounts for less than 2 per cent of India’s total retail sales, it is growing at a rapid rate and Forrester expects it to exceed $75 billion by 2020, according to its 2016 online retail forecast. 

"However, most of the discounting led growth was directed toward just 50 million online buyers — a small percentage of Indian shoppers. In order to keep growing at the same pace, online retailers have to penetrate beyond Tier-1 and Tier-2 cities into smaller cities and villages where customer acquisition will be challenged by multiple issues, including lack of Internet penetration, payment methods, logistics, and language support," said Satish Meena, analyst at Forrester research. 

Amazon entered India in June 2013 — years after Flipkart (2007) and Snapdeal (2010) launched — but Amazon made a commitment to invest $5 billion in the Indian online retail market at a time where Flipkart and Snapdeal were facing valuation markdowns and fund-raising difficulties.

Published on July 25, 2016

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