Why Amazon is the biggest winner on Flipkart's Big Billion debacle

While Flipkart has been in the news, receiving bouquets as well as flak, perhaps the real winner of it’s Big Billion Day sale has been Amazon India. Because each time Flipkart has been mentioned in the media, Amazon India has been mentioned in the same story, if not the same line.

Flipkart and Amazon India’s competitor Snapdeal too rode the wave and has made claims which seem to suggest they matched Flipkart’s one-day sales figures of Rs 600 crore. And while Snapdeal also spent some money on advertisements, they didn’t seem to come close to what Flipkart blew and Amazon seemed even further behind on ad spends. But if all three saw similar sales numbers, Amazon would have been the one that had the best margins thanks to its seemingly lower promotional spends.

Also, thanks to the numerous glitches that the Flipkart website witnessed during the sale, which are well documented in this article , what in reality perhaps happened was that quite a few disappointed consumers went to Amazon, because of better prices in some cases and also because when you as a buyer feel you are getting conned, you will go to a competitor waiting with open arms. It was certainly the case that many buyers felt let down, not only by what many saw as outright fraud with prices raised before the ‘sale’, but also items that were out of stock seconds into the sale, besides items supposedly disappearing from shopping carts and users reportedly even getting e-mails of order cancellations.

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The biggest proof that Flipkart lost the plot yesterday came from an e-mail I just received and which seems to have gone to all Flipkart customers, with the subject line, “Apologies, from Flipkart” and which has Flipkart founders Sachin and Binny Bansal admitting that there were issues with price changes, out-of-stock issues, cancellations, and of course technical issues with the website. But what’s clear is that Flipkart is admitting that some of the issues like price changes have caused serious damage, where in the company’s own words, “several products got changed to their non-discounted rates for a few hours.” The company admits this broke the trust customers had in Flipkart. They also admit that stock ran out for many products in seconds and that simultaneous buying saw some products getting overbooked with cancellations happening as a result.

Flipkart users are no strangers to encountering these errors while buying items like Xiaomi phones or other exclusive products launched on the site. However, while in those cases the anger of consumers is directed at the product manufacturers, in this case the anger has been directed at Flipkart.

And today, Flipkart is also paying the price from users. According to this piece in the Economic Times, Swati Bhargava, CEO of CashKaro, an online cash back site which directs user traffic to e-commerce sites is claiming that Amazon was the most trending site on CashKaro today.

The reason Flipkart is hanging its head in shame is because the founders realise that the trust is far more important than customer experience, which is usually seen as most important in e-commerce, though I would wager that in price-sensitive India, Rs 100 lower than a competitor on even a Rs 10,000 product makes customers forget about a single bad customer experience rather quickly. But when any consumer begins to see you as a bit of a con job, then the Indian who is anyway not the most comfortable with e-commerce will be very wary of you.

Unfortunately for Flipkart, the latter is what happened yesterday. Even as Flipkart now hangs its head in shame, Amazon India seems to be the one who will make the most of Flipkart’s billion woes thanks to its glitch-prone Big Billion Day.