Amazon Beats Flipkart To Become India’s Largest Online Retailer By Gross Sales

Amazon India has overtaken Flipkart in gross sales for the first time, according to Barclays, even as the online retail war intensifies with Walmart acquiring the homegrown retailer.

Seattle-based Amazon, largely helped by its marketplace, generated $7.5 billion in gross sales in the year ended March compared with $6.2 billion by Flipkart, Barclays said in a report reviewed by BloombergQuint. That number excludes the gross merchandise value of Flipkart Group subsidiaries Myntra and Jabong.

The Indian e-commerce market is the next big battleground where online shoppers are expected to more than double from 80-90 million in 2017 to 180-200 million by 2020, Barclays said. The size of the market is also expected to jump twofold to $40-45 billion during the period, according to the report, with apparel and consumer electronics driving the bulk of the growth.

Walmart sensed the opportunity when in May it bought 77 percent stake in Flipkart for $16 billion, the biggest acquisition for the world’s largest brick-and-mortar retailer. It’s up against Amazon that has already invested nearly $5 billion in its Indian business.

Amazon’s gross sales are expected to rise to $11.2 billion in the ongoing financial year than ends in March, according to Barclays. That will be 30 percent more than the $8.7 billion estimate for Flipkart.

Flipkart, in an emailed response to BloombergQuint, said “it remains an unquestioned leader and it has also been established by independent research houses which track the industry in India closely.” Amazon said it does not comment on industry reports.

Flipkart Still Bigger By Revenue

The Indian retailer continues to be bigger than Amazon in revenue, according to the report. The homegrown e-commerce company’s revenue was $3.8 billion in the last financial year compared with Amazon India’s $3.2 billion.

Amazon is catching up quickly as it continues to grow faster at about 82 percent compared with Flipkart 47 percent’s growth in revenue, Barclays said.

One area where Amazon lags behind Flipkart is the wholesale business. The U.S. retailer’s wholesale gross merchandise value was at about $1.9 billion in FY18, the report said. That’s about half of Flipkart. Yet, Amazon has grown this business significantly since 2016 and added more dollars than Flipkart’s business-to-business operations, Barclays said.

Mounting Losses

The battle for supremacy continues to bleed both the online retailers in India. Barclays estimated Amazon and Flipkart’s combined losses to be close to $3 billion in the year ending March 2019—Amazon is expected to contribute $1.8 billion and Flipkart $1.3 billion.