Rival Flipkart’s sales stood at $6.2 billion, according to a report by Barclays. The report, however, did not include sales of Flipkart’s subsidiaries Myntra and Jabong.
Five years after setting foot on Indian soil, US online retail giant Amazon has emerged as the leader in the domestic e-commerce market, zipping past homegrown rival Flipkart in gross merchandise value (GMV), or gross sales, on its platform.
Amazon’s India unit clocked gross sales of $7.5 billion in the year ended March 31, 2018, while rival Flipkart’s sales stood at $6.2 billion, according to report by Barclays published on Monday.
The report, however, did not include sales of Flipkart’s subsidiaries Myntra and Jabong.
“While Amazon and Flipkart were neck and neck on GMV (gross merchandise value) in FY17, Amazon took the clear lead in FY18.
"The company (Amazon) generated $7.5 billion on GMV versus $6.2 billion for Flipkart, driven by its B2C unit which continues to grow its lead over Flipkart’s B2C unit,” said the Barclays report, reviewed by Business Standard.
At the time of announcing the Flipkart deal in May, Walmart had said the consolidated GMV of the Flipkart Group (including subsidiaries Myntra and Jabong) stood at $7.5 billion in FY18.
India, the last large open market globally, is witnessing a fierce battle for dominance in the e-commerce space, driven by the huge number of people flocking to online shopping sites.
The world’s largest retailer (by revenue), Walmart, also jumped into the market earlier this year by acquiring 77 per cent in Flipkart for $16 billion.
Walmart’s move has pitted it directly against Amazon, which has almost exhausted its $5 billion investment commitment for India.
Flipkart and Amazon make up a majority of India’s online retail, which, Barclays predicts, would grow two-fold to $40-45 billion by 2020.
The report added growth in Amazon India’s sales continues to be higher than that of Flipkart in this financial year, estimating that the company would touch $11.2 billion in gross sales in FY19.
Given its current pace of growth, Flipkart is estimated to close FY19 with gross sales of $8.7 billion, giving its rival a lead of about 28 per cent in terms of GMV.
However, Flipkart continued to hold the lead over Amazon in terms of revenue.
In FY18, Flipkart posted revenues of $3.7 billion, while Amazon India’s e-commerce revenue stood at $3.1 billion, according to Barclays.
But Flipkart might not be able to keep its lead here for long, the report said, citing Amazon’s revenue growth, 82 per cent in FY18, as compared to Flipkart’s 47 per cent, as the reason.
“Flipkart continues to be bigger than Amazon in terms of revenue, although Amazon is catching up quickly and continues to grow much faster,” the report added.
But the fight is far from over. Barclays predicts that Flipkart and Amazon could burn more than $1.5 billion each in the calendar year 2019 as they continue to pump in funds.
The report also said that India’s online shopper base is estimated to touch 180-200 million by 2020 from 80-90 million in 2017.
According to the Barclays report, Amazon Web Services (AWS) revenues in India grew by over three times to $192 million in FY18, while Amazon Pay, launched at the end of FY17, saw 53X growth to rake in $61 million in FY18.
Photograph: Abhishek N Chinnappa/Reuters