Research firm Forrester Research recently conducted a survey and concluded that Amazon continues to be the preferred destination for most of the buyers when it comes to online shopping.
Amazon is taking the lead in the market, thanks to its loyalty subscription program Amazon Prime which guarantees two-days delivery to many cities, along with other benefits.
The Prime service, which is currently available at just Rs 499 per year, also gives access to Prime Video — an online streaming platform for movies and tv series.
The survey was conducted among 2,000 Indian consumers between February and March this year. The result of the survey showed that 80 percent shopped with Amazon, while nearly 65 percent shopped on Flipkart.
The research firm suggests that Amazon India had surpassed Flipkart in customer preference for the first time last year. While there are no absolute numbers, the survey claims to have found that the number of customers who shopped at Flipkart dipped from close to 70% last year to 65%. On the other hand, customers who shopped on Amazon grew from 75% to 80%.
Satish Meena, senior forecast analyst at Forrester, said,
Shipping cost, shipping time, product review-ratings, low price guarantee and retailers return policy are the key factors for customers while picking an online retailer. Over a period of time, Amazon rated high in almost all the factors allowing customers to order more products and also increasing the number of categories they purchase.
Since quite some time, Amazon has been emphasising on increasing the customer engagement on the platform. The strategy could allows the Seattle-based company to increase the wallet share from existing its online buyers in India, along with adding more buyers as it aims to provide a more superior customer experience.
Amazon India claims that it has seen 25% year-on year growth in terms of purchase frequency. The growth is said to be mainly driven by the growth in consumables and fashion categories – which Amazon has been pushing hardly because of higher margin rates.
Apart from the growth in business, the company has also said that it has witnessed growth in new customer acquisition, which grew by 60 percent Year-on-Year in the year 2016.
On the other hand, for Flipkart, ever since Kalyan Krishnamurthy became in-charge of Flipkart as a CEO, the company finally managed achieve what it was looking for since a long time — growth and capital. While the company has been growing under the new leadership, it also managed to raise significant funding this year. The Bangalore-based startup now has a massive $4 billion in its kitty.
The financial security allows the company to focus on growing the overall market by adding more buyers and categories to the online channel as well as to improve the customer experience. With several strategic partnerships in place, Flipkart is looking for success and is fully equipped to give tough fight to Amazon.
The report from Forrester suggests that overall customers’ online retail spending has increased in 2017, which saw a dip last year. It says that online spending grew by 11% in the first half of 2017, with the online spending per buyer growing to Rs 26,671 in terms of mean spending.