Flipkart Vs Amazon

- Cheryle vinothini

Flipkart:

 

SWOT analysis:

 

Strengths:

• Established consumer base

• Own distribution channel

• Good understanding of domestic markets

• Steady cash in-flow and investments

• Acquisition of Myntra

 

Weakness:

• Late entry into mobile space after entry of amazon

• Fewer innovations compared to competitors

• Future profitability since focus is more on expanding consumer base

 

Opportunities:

• Global markets through Mergers and Acquisitions

• Growing online shopping

• Growing smartphones and mobile shopping

• Growing online fashion retai

 

Threats:

• Amazon, Amazon and Amazon

• Other competitors like Homeshop18

 

Amazon

 

SWOT Analysis:

 

Strengths:

• Global leader

• Strong brand value

• Experience for almost a decade

• Input of cash from profits from other parts of worlds

 

Weakness:

• Takes time to understand local markets

• Operates at low margins

• Depends on local distributors

 

Opportunities:

• Innovations like In-a-day delivery

• Setting up physical stores

 

Threats:

• Strong local competition

• Relaxation of FDI allows more competition

• Government policies

 

 

The Big Battle:

 

Flipkart announced that it has raised $1 billion for investment in India. Within the next day Amazon shelled out $2 million for investment thus stealing Flipkart’s thunder. This race for the market share has just begun and is bound to go on for a few years. The brand which has the strongest stamina and willingness to burn money in the longer run will emerge the winner. However they cannot expect to turn profitable soon with the low margins and increased investments.  The other local players may have to give way for the Big 2 since they cannot raise enough funds to compete except for SnapDeal maybe. The acquisition of Myntra will surely give Flipkart the upper hand in the online fashion sector however with Amazon churning in cash and looking for takeovers will be a formidable challenger. The recent trend of having exclusive selling rights of a particular brand has proved fruitful for Flipkart( Moto, Xiomi). However Amazon didn’t meet expectations(Samsung KZoon, Karbonn).

 

Consumer Benefit:

 

The platform is well set  and both may emerge victorious but in the meantime the ultimate winner in the battle between the giants is the end consumer. The brands are lowering prices in order to establish a loyal customer base. This will also increase the reach of e-commerce in India since the customers have started discovering that the prices are much lower since they do not have physical cost such as showroom cost.