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How Amazon, Flipkart performed in 2020

Highest growth in e-commerce penetration was seen among older customers

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KOLKATA: The stringent lockdown during the early phase of the Covid2019 pandemic brought about sea changes in consumer behaviour in India. E-commerce was one of the sectors which emerged as beneficiaries thanks to first time online shoppers and increasing online payment. Among the leading players, both Amazon and Flipkart grew substantially.

While Amazon started the year 2020 with a substantial lead on penetration, Flipkart has closed in by December. Both etailers grew reach, as more consumers shifted online during the age of social distancing. However, Flipkart’s 20 per cent growth left Amazon’s five per cent growth, although on a much larger base, looking low, a report from Kalagato said.

Moreover, e-commerce penetration has deepened across the board. Interestingly, the highest growth was seen among older customers of 45+ age group and the 35–45 age group to a lesser extent. The former category has the potential to unlock further growth for the sector, as it still remains the most under penetrated segment. Data from the research firm also showed that this is the cohort where the gap between Amazon and Flipkart is the biggest.

From the transacting/paying customers, Flipkart performed better in the year. While the Walmart-owned online retailer started 2020 on a stronger footing than Amazon, the platform has come out on top through the pandemic as well, the report added. Amazon grew transacting reach by 1.5X, while Flipkart doubled it during the year. The growth was sharper among females, tier-3 towns and older customers.

Flipkart with higher open rates and time spent also led in average transaction value per customer at 12 per cent higher order values on average than Amazon, and a whopping  30 per cent lead during the festive period – October 2020. But an Amazon customer orders 30 per cent more frequently than a Flipkart customer, highlighted the report. The better loyalty of Amazon customers have been attributed to holistic bundled service including Prime Video content.

The report added that Flipkart would need to work on greater reach and desirability, whereas Amazon needs to move its inactive base into transacting customers. Moreover, the entry of Reliance Industries with Ajio and JioMart and the Tata Group with TataCliq and its investment into 1MG and BigBasket has made the competitive e-commerce space more complicated.

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