Amazon India has notched up a victory over Flipkart this year, at least when it comes to dynamics of running the business. The 2017-18 financial year saw Amazon India go ahead of its biggest rival in the country Flipkart on gross sales, generating $7.5 billion compared to $6.2 billion for Flipkart. It’s a big deal for the US-based e-commerce company, which has been in the Indian market for fewer years than Flipkart. The information was published in a report by Barclays, and reported on by Bloomberg Quint.
Amazon’s success can be credited to its huge investment in its Indian operations. The company continues to devote resources to building its business in India, having had Rs 2,000 crore pumped in earlier this year. Although Amazon India’s revenue is still lower than Flipkart’s, the higher gross sales suggest that Amazon is doing a better job in moving products, while also spending more on building up its business operations.
Walmart acquired a controlling interest in Flipkart earlier this year, but the company will still face an uphill task in maintaining its leadership position in India. Amazon’s powerful moves to solidify its position in the extremely lucrative Indian e-commerce market, which is expected to grow to about $40-45 billion per year by 2020. However, while revenue is high for both of these companies, losses are as high.
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Amazon and Flipkart are expected to make combined losses of about $3 billion this year. Both of these companies are burning through capital at this stage, but the hope is that market growth and solidified positions will help turn these losses around quickly.