Amazon overtakes Flipkart! US retail giant records 20% higher sales in India, says report

It took five years but the world's largest ecommerce player is now also India's largest etailer by gross merchandise value (GMV). According to a Barclays report released on Monday, Amazon's India unit clocked 20% higher gross sales in the year ended March 31, 2018, compared to homegrown rival Flipkart, thereby taking the lead for the first time since it entered the country.

"While Amazon and Flipkart were neck-and-neck on GMV 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," the Barclays report read. However, according to The Business Standard, the report did not include sales of Flipkart's subsidiaries Myntra and Jabong.

In May, while announcing the $16 billion deal with Flipkart, Walmart had pegged the consolidated GMV of the Flipkart Group including the above-mentioned fashion platforms at $7.5 billion in FY18. So by that standard, Amazon India has managed to pull abreast of Flipkart, but is yet to emerge the domestic leader.

In any case, according to Barclay's, Flipkart has maintained its 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. Significantly, the domestic player may not be able to hang on to its leadership position for long given that Amazon is growing much faster - Amazon's revenue growth in the previous fiscal stood at 82% against Flipkart's much-lower 47%.

The report added that growth in Amazon India's sales continues to be higher than that of Flipkart in the current financial year, estimating that the company would touch $11.2 billion in gross sales in FY19. On the other hand, at its current pace of growth, Flipkart is estimated to close FY19 with gross sales of $8.7 billion.

Moreover, 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.

But given the potential of the market - Barclays expects India's online retail segment to grow two-fold to $40-45 billion by 2020, while the country's online shopper base is estimated to increase by 100-150% to touch 180-200 million - neither contender is going to drop the ball at this point. Citing the report, the daily added that Flipkart and Amazon could burn more than $1.5 billion each in the calendar year 2019 as they continue to pump in more funds.

In the year so far, Amazon has infused $1 billion into its India business unit, Amazon Seller Services, including Rs 2,700 crore investment in August. Not to be outdone, Flipkart in September pumped in Rs 3,463 crore into its online marketplace, Flipkart Internet. This is its biggest capital infusion since Walmart acquired a majority stake in the company.

Edited by Sushmita Agarwal