Ecommerce growth slugfest: Amazon claims 66%, Flipkart asserts 80%

Homegrown e-commerce major Flipkart said the company has recorded over 80% growth in gross merchandise value (GMV) between April and September this year, in response to Amazon India’s claims of a higher growth rate.

The India unit of US-based online retail giant Amazon had said it registered an overall 66% growth in gross merchandise sales (GMS) during the six-month period. GMS is the value of products sold on an ecommerce platform in which the marketplace provider has taken a commission.

“We do not believe in the GMV metrics. We believe in GMS which includes the price of the product that the customer actually pays minus returns and tax,” an Amazon India spokesperson said.

Flipkart calculates its growth based on GMV which is the value of products sold through an online marketplace before discounts.

In its recent half-yearly report, Naspers, one of the largest investors in Flipkart, had stated that the ecommerce firm’s gross sales grew 43% during the six-month period.

However, a Flipkart spokesperson said the company’s growth in the six-month period was in the mid-80s range. “Our growth between April and September is in the region of mid-80s. Naspers brings out its half-yearly reports always with a time lag. Therefore, the growth numbers have a time lag of three months in the report. The report has calculated growth numbers until June, though the reporting period is September. That’s why it says 43%,” the spokesperson told VCCircle.

Citing the Naspers report, an Amazon spokesperson told The Time of India that the company has grown at a faster rate than its local rival. “We are clearly growing faster than industry peers who are posting growth at about 20-25%. Authenticated data, for us and competitors, show we grew faster than the competition in the six-month period. We grew 66% in GMS during this period, while authenticated data of rival shows they grew 43%. We are also surprised by certain narratives about rival's turnaround story despite credible data showing we are growing faster," an Amazon India spokesperson told the publication.

According to the data shared by Amazon India, the number of units sold on Amazon India grew 75% during the April-to-September period.

Amazon India said its gross sales by value grew 72% and gross sales by volume jumped 67% during the September quarter (July-September) against 58% and 88%, respectively, in the previous quarter. In 2016, the company registered a 108% jump in GMS and a 124% growth in the number of units sold.

Dismissing the claims made by Amazon India, the Flipkart spokesperson said the e-tailer’s growth continues to outpace the industry. “Flipkart continues to outpace the industry and our growth has accelerated significantly during the July-Sep quarter on the back of a very strong festive season. This report actually refers to the January-June period and, like all growth data, has a lag of three months; so the comparison isn’t like-for-like or relevant," the company spokesperson said in an email.

Amazon’s claim of faster growth rate over Flipkart, however, does not include the sales numbers from the latter’s fashion verticals – Myntra and Jabong – where Flipkart holds a massive market share.

There were several instances of public slugfest over market share dominance between the two companies in the past.

The most recent one was after the yearly festival sales period when Flipkart claimed its market share during the period was more than 70% of the e-commerce segment in India. It said that its sales during the period doubled compared with last year, though its marketing spend was little changed. The company also said its share is 70% in the online smartphones market, 80% in fashion and 65% in large appliances.

However, Amazon had immediately contested these claims. In response to an email query from VCCircle, Manish Tiwary, vice president of category management at Amazon India, had said: “There are no credible, recognised research reports at present in India with robust methodology and significant sample size to provide objective market share reports. We have noticed poorly informed speculative reports with irrelevant sample sizes whose numbers do not add up to what we are seeing in the industry.”

Tiwary claimed that Amazon enjoyed continuous growth across key categories such as smartphones, large appliances, fashion and more. “The Great Indian Festival Sale marked our biggest shopping event where we saw tremendous growth across multiple categories, from smartphones (2.5 times growth) and large appliances (four times growth) to kitchen and dining products (nine times), beauty (six times), home category (five times) and fashion,” he said.

Meanwhile, Amazon.com Inc.’s revenue from its India marketplace more than doubled in the year through March 2017, as the online retailer continued to expand its operations.

Amazon Seller Services Pvt. Ltd, the marketplace arm and the flagship unit of Amazon’s India operations, reported revenue of Rs 3,129 crore for 2016-17, showed a filing with the Ministry of Corporate Affairs.

That’s a 41% rise from Rs 2,217 crore in 2015-16, regulatory filings show. Responding to the filings report, an Amazon spokeswoman had said, “Comparing like to like, the Amazon marketplace revenue in India grew by 105% for the year ended 31 March 2017. The annual returns filings include other line items.”