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Amazon trumps Flipkart in online sales of smartphones in Q2 2020

Amazon’s smartphone market share was driven by Xiaomi, Samsung, and OnePlus.

Dashing past Walmart-owned Flipkart, Amazon India became the top online marketplace in smartphone segment in the second quarter of 2020, according to a new report by Hong Kong-headquartered research firm Counterpoint.

With a 47% market share, Amazon grabbed its highest ever share among online channels, the report said. Flipkart, on the other hand, cornered 42% market share, followed by Xiaomi’s online marketplace Mi Store at 10%. Overall, online channels held a 43% share in the Indian smartphone market in Q2 2020.

Smartphone is the largest category for e-tailers, accounting for almost half of their gross merchandise value (GMV). GMV implies the total value of merchandise sold and is a metric used by e-commerce businesses to measure total sales on their platforms without accounting for returns or cancellations.

Amazon’s smartphone market share was driven by Xiaomi, Samsung, and OnePlus, the report said. Among the top 10 smartphone models on Amazon, nine were from Xiaomi and Samsung.

Amazon did a great job in INR 15,000 to 20,000 (USD 200 – USD 270) price band with Samsung Galaxy M31 and M30s being the top models, while OnePlus remained the top premium smartphone brand on Amazon.

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However, Flipkart continues to maintain its stronghold in sub-INR 10,000 (USD 133) price band.

“Flipkart’s share declined; however, the platform led the sub-INR 10,000 price band with more than 50% share in the overall online smartphone market,” the report noted.

According to various industry estimates, Flipkart has so far been leading the e-commerce market, a claim which Amazon India has denied.

For instance, Amazon and Flipkart accounted for 90% of the USD 3 billion worth sales that happened during last year’s festive sale across all channels, according to research firm RedSeer. The research firm said Flipkart led the festive sales, accounting for 60-62% of total GMV, leaving Amazon with only 30% of the total sales pie. October to December quarter marks the festive season in the world’s second-most-populous country and is the most important time for e-retailers.

When combined with the group companies Myntra and Jabong, which Flipkart had acquired in 2014 and 2016 respectively, the Walmart-owned e-tailer’s total sales reached 63% of GMV, the report added.

According to RedSeer, the key reason for Flipkart’s leadership was its strong performance across categories including mobiles.

However, in the last quarter, the Walmart-owned company lost its place to Amazon in the largest category.

“The COVID-19 pandemic had a huge impact on the overall smartphone market, April being a washout month,” Counterpoint’s senior research analyst Prachir Singh stated. “However, due to the current circumstances, consumers are preferring online platforms.”

“Brands are aligning their product as well as channel strategies to drive up volumes. Multiple financing options and attractive offers have made the devices more affordable for consumers,” he added.

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The report pointed out that the healthcare pandemic has led to brands adopting an online-to-offline (O2O) business model and hyperlocal delivery to help their offline channel partners.

Singh said India witnessed pre-COVID level smartphone shipments at the end of Q2 2020 due to the pent-up demand created by the nationwide lockdown.

“Due to the preference for online channels, no offline-exclusive model was launched during the quarter. However, during the same period, 11 online-exclusive SKUs were launched,” stated  Counterpoint’s research analyst Shilpi Jain. The research firm now expects to see online channels taking a 45% share in the Indian smartphone market in 2020.

Xiaomi remained the market leader in online sales with 44% market share, while Samsung claimed 25% market share, its highest online-led sales, as it aggressively pushed its products on e-commerce platforms.

After recently concluding their sale events earlier this month, Flipkart and Amazon are now gearing up for the festive sales that would kick off starting September.

Flipkart clocked a GMV of INR 2,600-2,700 crore (USD 347-360 million) during its five-day Big Savings Days sale, according to a report by local media Economic Times (ET). Meanwhile, Amazon is estimated to have posted around USD 500 million in GMV, the report said, citing data from market tracker Forrester Research. However, the report added, company executives and market insiders have put Amazon’s Prime Days GMV at INR 3,000-3,200 crore.