Moto G4 to be sold exclusively on Amazon, why did Flipkart lose?
Indian e-commerce market is at its highest growth today. There have been many acquisitions (Freecharge acquired by Snapdeal) and launch and failure of many new start-ups in 2015. E-commerce is one market where even successful companies like Mahindra and Aditya Birla Group want to rule this day. Hence the emergence of m2all and abof. The upcoming mobile 4G speed is soon expected to have major positive effects on e-commerce.
In the midst of such a boundless competition, Flipkart and Amazon are at their own private war.
Motorola gained tremendously on Flipkart’s customer base when it launched its G-series smartphones in 2013.
The common Indian man wanted affordable rates on smartphones which Flipkart and Moto could then provide. Now Moto G4 and Moto G4 Plus are being launched exclusively on Amazon India on 17th May this year. Motorola will eventually open the smartphone sale to other platforms like it did in the past for other models.
Along with good customer service and comparable cheaper rates on the products, Amazon India also competes in the ecommerce market by leveraging on its brand name and wider international portfolio.
Amazon launched in India in 2013 and from then on it has been showing a tough competition to other e-tailer companies specially Flipkart to even stand in the market. Flipkart launched in 2007 saw a tremendous growth until 2015 when its evaluation was $15Bn and since then until now its evaluation has been pinned down at $11Bn by Morgan Stanley.
Is Flipkart losing to Amazon? Here is the case in point:
By forcing its users to buy from a mobile app will not do any good to the Flipkart but will only add on to irritating them. Not all the users are tech-savvy and tech-efficient. Amazon provides customer with international cross subsidization and products can be bought at cheaper prices. Flipkart lost its users trust when it could not cater to its customer service in the Big Billion Day sale in 2014 and also to the product providers/vendors who had to deal with un-necessary announced low price. Amazon on the other hand is able to provide 1-day priority delivery service in India where Flipkart struggles. Amazon has a flourishing model where it uses its profits and GMV to expand while Flipkart bases its profits on the venture capitalist finances. Any real company runs on its business money and not on VC money or hedge funds. Amazon’s strategic moves in partnering up with firms such as the Future Group and gaining much wider exclusive retail market has set aside all the questions on Flipkart being Amazon’s competitor. Amazon India has succeeded in gaining customer’s trust over any other e-tailer. Amazon has pioneer technology services which leverages from its parent company platform catered by Amazon web services AWS.
So at the end of the brooding, it all pins down to Motorola getting good margins, better customer service, preferential business treatment that drives the business. Amazon can afford to beat others because it can afford to undergo losses.
Picture Credits: http://www.slideshare.net/SocialSamosa/amazon-vs-flipkart
