AMAZON, FLIPKART WAGE PRICE WAR

Both e-commerce entities are also looking at retaining existing customers by offering better services

India’s e-shoppers are in for a treat this festive season as Flipkart and Amazon fight it out to reach new customers and grab market share. India may not see the deep discount wars of the past few years, yet a discount war is brewing. Paytm Mall, which will become aggressive this festive season, has indicated that its online deals will also be available from its offline partners.

India’s e-commerce giants are far from turning profitable and they need to expand the base of online shoppers beyond 60100 million people. Both Flipkart and Amazon are also looking at retaining existing customers with better services.

Anil Kumar, chief executive officer (CEO) at RedSeer Consulting, says the e-commerce majors will market a few fastselling products at big discounts to draw customers and the rest of the products will be priced attractively. The days of indiscriminate discounting are over, he adds.

“The burn for the industry has come down to around 15 per cent of gross merchandise value, from 28-30 per cent a year and a half ago,” Kumar says.

This festive season will also be the first time Amazon faces Japanese investor SoftBank. With $2.5-billion investment in Flipkart and biggest stakeholder in Paytm’s parent company, One97 Communications, SoftBank has opened two fronts against Amazon. SoftBank still has a 33 per cent stake in Snapdeal.

“Now SoftBank has the biggest mobile wallet and fintech company in India, as well as the biggest online marketplace. It will use these two to fight Amazon. While the Snapdeal bet did not pay off, SoftBank is sure a few years down the line, when the investee companies go public, they will be worth at least $50-60 billion,” said Droom founder and CEO Sandeep Aggarwal.