How Amazon, Flipkart and Snapdeal Compete for Mobile Shoppers in India
Earlier this year Indian government introduced new regulations that restrict operations of foreign-owned e-commerce companies in the country. While it’s too early to know the impact of these regulations, now is a good time to examine the performance of the biggest global and local players in India’s booming e-commerce industry and see how they compete. Leveraging 7Park Data’s global multi-million mobile user panel, let’s look at user behavior and recent growth trends of the Amazon, Flipkart, and Snapdeal mobile shopping apps. Considering that the majority of Internet users in India access the web through their mobile devices, mobile e-commerce (also known as “m-commerce”) user engagement is particularly telling.
Amazon has been on a steady growth path in the past two years, attracting new shoppers and keeping them engaged over time. In year-over-year analysis of Amazon’s app performance, we saw 88.6% increase in weekly active users (WAUs) and 7.4% growth in sessions per active user. The company’s aggressive strategy to win over mobile Internet shoppers in India has been paying off.
While Amazon’s arrival in India stirred waters, local competitors Flipkart and Snapdeal didn’t fade into the abyss. In our year-over-year growth analysis, Flipkart’s install base and sessions per user grew by 24.5% and 5.4%, respectively. Based on our user panel, Flipkart captured 21.3% of weekly active users, compared to Amazon’s 12.4% at the beginning of April 2016.
“Flipkart’s decision to go app-only was bold, but they underestimated the network effects of e-commerce. Amazon’s desktop-plus-mobile strategy gave them an advantage, not just in driving short-term revenue, but also in adding new smartphone users,” says Byrne Hobart, 7Park Data’s Lead Internet Analyst.
Snapdeal finished the first quarter with a decline in user engagement. We saw -18.7% decline in WAUs and -8.6% decline in sessions per active users in comparison with the same time period last year. And while Snapdeal continues to attract new shoppers — 9.4% growth in install base — the app lags behind Amazon and Flipkart.
The new regulations, including restrictions on sellers and discounts, may affect e-commerce companies’ ability to attract and keep users. Aimed at leveling the playing field, the regulations may benefit some companies and hold back the growth of others. Nonetheless, there’s a lot of opportunity for e-commerce growth in India, as the country’s middle class continues to grow and more individuals gain access to the Internet and mobile devices.
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