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Amazon India closing in on Flipkart as gross sales volume in Jan-Mar zooms 85% on year

Amazon, the Indian subsidiary of the US-based online marketplace company, continues to put up a spectacular show in the country's fast-growing ecommerce space even as home-grown rivals Flipkart and the struggling etailer Snapdeal face pressure on the back of dwindling sales and liquidity crunch.

Shrugging off the growing concerns that online sales have taken a beating post the noteban exercise in November last year, Amazon India has bounced back sharply in the first quarter (Jan-Mar) of 2017, clocking a robust 85 percent rise in gross sales volume over a year-ago period, a Mint report said.

Further, the US-based etailer's gross sales in terms of value jumped around 65-70 percent during the quarter, even as the overall online market sales expanded 15-20 percent, the report said.

Compared to this, India's largest online marketplace firm Flipkart Internet's gross sales, including that of Jabong and Myntra, rose 25 percent in the quarter under review.

Representational image. AP

Representational image. AP

Amazon's robust gross sales performance cannot be strictly compared with Flipkart as it has come on the back of a low base of last year. Also, both Amazon and Flipkart's improving sales is also due to disappointing performance of the country's third largest ecommerce player, Snapdeal, whose sales have been comparatively disappointing.

Snapdeal, the New Delhi-based online marketplace has come under tremendous pressure off late, with slow sales and investors' cash burn through heavy discount offerings over a period of time which has led to a cash squeeze in the company.

Since the beginning of the year, the Kunal Bahl and Rohit Bansal-promoted firm has been in talks with its Japan-based investor, SoftBank and other investors to raise capital, but to no avail.

Early this month, there were report that the company is looking to raise just over $100 million from existing shareholders including Japan's SoftBank and new investors. From a peak valuation of around $6.5 billion, Snapdeal's valuation could be around $1 billion.

In February, the firm also laid off 600 employees and its founders Kunal Bahl and Rohit Bansal stopped drawing salaries.

Earlier this week, several media reports also suggested that Japanese investor SoftBank has been mulling selling Snapdeal to Flipkart, although two early-stage investors are opposed to the deal.

With lingering woes surrounding Snapdeal, the stiff competition between Amazon and Flipkart is expected to heighten this year as well.

In fact, Amazon's overall performance in two months of last year was better than that of Flkpkart as the latter's sales slipped in successive months during the first half of last year.

Flipkart, too, is gearing up for competition against its US-based rival and China's Alibaba, with the Bengaluru-headquartered ecommerce major looking to snap up US-headquartered eBay's India operations.

Expanding its presence in India, also said it has set up seven new warehouses (Fulfilment Centres or FCs) to cater exclusively to its large appliances and furniture category, a move that will create 1,200 new jobs.

Updated Date: Apr 07, 2017 12:11 PM

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