Capital Cooling, Its Own Defects, India Local Electricity Supplier Is In The Bottleneck.

3 years after entering the India market,

For the first time, squeezing the first local electricity supplier Flipkart to become India's largest retail electricity supplier.

According to India media reports, five people familiar with the matter revealed that Flipkart's total sales last month were below 20 billion rupees and Amazon was more than 20 billion rupees.

Another cable reported that Snapdeal ranked third last month's revenue of about 6 billion rupees.

However, total sales refer to the total amount of goods sold, not net profit.

According to the India statute, India's three leading business giants, Flipkart, Snapdeal and Amason, are all

Its net profit includes commission and service fees charged to third party businesses.

At present, Amazon only surpassed Flipkart in total sales in July, and the two giants' battle over the overall market share is far from over.

Flipkart's revenue does not include its two largest.

The performance of Myntra and Jabong of the electricity supplier, while the sales of Snapdeal also did not calculate the performance of its payment platform FreeCharge.

If you add Myntra and Jabong revenues, Flipkart's overall performance is still far ahead of Amazon.

As early as the beginning of this year, the fight between Flipkart and Amazon has become increasingly fierce. Amazon has taken the place of it, and the July revenue figures have opened the curtain for the first time.

In response, a spokesman for Flipkart replied in an email: "no matter sales volume or other key consumer indices, we are still ahead of the list. We have also been leading the market share of various major categories, including mobile phones, fashion, furniture, electronics and electrical appliances.

In recent months, we have not only achieved steady growth in revenue, but also strengthened implementation, improved logistics speed and improved product quality.

Flipkart was founded in September 2007. Since 2011, it has been sitting on top of the India electricity supplier. Snapdeal has been ranked second in the list, ranking the third in the Amazon until the third quarter of last year, the market share is still not high.

However, this ranking has become a history. Now the question is whether Amazon can stay ahead, whether Flipkart can rebound against the trend and whether the winner can "eat" the entire India electricity supplier market.

Capital cooling, its own defects, India local electricity supplier is in the bottleneck.

After entering the India market for 3 years, Amazon has already thrown away the local electricity supplier Snapdeal, and has constantly narrowed the gap with Flipkart.

Amazon, which once lost its grip on Alibaba in the Chinese market, is now "lost in the East" and Amazon's success in India cannot be separated from three factors: Amazon's investment in India over 2 billion dollars, including the Snapdeal, including India's start-ups, and the Flipkart failure of its competitor last year.

In July 2014, Amazon CEO Geoff Bezos said Amazon would invest $2 billion in the India market. However, just a day ago, Flipkart announced that it had completed the $1 billion financing.

Amazon once claimed that it would not react to competitors, but this time it immediately counterattacked.

This is an unusual move. It is clear that Amazon will win the India market after losing China.

Seeing the huge investment of Flikpart and Amazon, Snapdeal was also not to be outdone. In October of the same year, it announced that it won $627 million of Softbank in Japan.

In the next 15 months, the three major suppliers of electricity and electricity in advertising, discount and logistics took turns throwing money in order to compete with consumers and businesses.

At that time, the financing boom of India start-ups reached its peak, and Flipkart and Snapdeal earned $1 billion 400 million and $600 million respectively.

However, the financing heat gradually cooled over the last year.

Investors' attitude is being cautious, because start-ups' discounts on advertising and discounts can not only replace customers' loyalty, but also lead to serious losses.

This year, a large number of investors turn from cautious caution to no investment.

Flipkart and Snapdeal should not only face severe financing environment, but also face up to their own problems.

As Flipkart's CEO, Sachin qinssaar misjudged consumer behavior. He predicted that almost all online shopping would move to mobile terminals.

Therefore, in May 2015, after converting its Myntra to a mobile e-commerce provider, he also wanted to turn Flipkart into a shopping platform with only mobile terminals.

At the same time, Flipkart is also rapidly changing the platform mode. A large number of third party businesses will be settled to change the original mode of Self Inventory.

Although Flipkart finally retained the PC side, these two moves still let many consumers switch to Amazon, spillover effect will affect the development of mobile terminal business.

The rapid change of business mode not only reduces the quality of goods, increases the time of delivery, but also damages the overall image of the brand.

Flipkart has won the first prize by relying on all its customers and satisfying customers' beliefs. Now, the two step wrong move is like lifting a stone to hit one's own foot.

In August last year, Snapdeal's CEO CEO said that Snapdeal would surpass Flipkart in March this year.

But Snapdeal does not have the self built logistics of Flipkart and Amazon, which means that Snapdeal can only rely on low prices to attract consumers.

Last year, when the capital fever subsided, investors needed to see profits, and Snapdeal had to cut down on discounts and advertising, so it was not surprising that revenues fell sharply.

In an interview this July, Barr said that Snapdeal will focus on increasing real profits this year instead of increasing GMV.

Amazon in India: opportunities and challenges

Amazon's brand reputation is based on huge sums of money to improve products, discounts, advertising and logistics.

For example, in August, Flipkart and Snapdeal provided more than 40 million and 35 million commodities respectively, while Amazon provided more than 65 million commodities.

Amazon learned lessons from its failure in China. Since entering India, it has implemented localization strategy based on local consumption habits.

In order to bypass the India government's policy of restricting foreign direct investment in electricity providers, Amazon India has also established a joint venture with retail companies CatamaranVentures CloudtailIndia.

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Officially launched in mid 2014, Cloudtail soon became the single largest business on Amazon, and even accounted for 40% of sales in some months.

Amazon can control consumer experience through Cloudtail and some business cooperation projects, such as Fulfilment, EasyShip and SellerFlex.

Take Fulfilment as an example, as long as businesses join the project, they can sell goods to about 50 million of Amazon Prime users. If they do not join the project, businesses will not be able to reach these consumers.

Smart phone is the single largest source of profit for the electricity supplier. Amazon has established an exclusive partnership with Cloudtail, including Motorola, millet and one plus mobile phones.

Flipkart once had an exclusive partnership with Motorola and millet, but now has suffered double losses.

According to print media Mint, Amazon's market share in India expanded gradually in August last year, though it was still far behind Flipkart and Snapdeal, and Amazon's market share accelerated at the beginning of this year.

However, the new electricity supplier Ordinance promulgated by the India government in March has caught three big electric providers unprepared.

The new regulation limits the "discount sale" of the electricity supplier, prohibits the electricity supplier from affecting the commodity price, and requires that the profits of a single business can not exceed 25% of the total profit of the platform.

The new regulations have dealt a heavy blow to the electricity supplier market in India.

According to Redseer, a consultancy, India's total electricity sales in June dropped to $12 billion, down from $13 billion in March and $15 billion in December last year.

In the past three months, Amazon has been looking for new strategies for discount sales.

Amazon CEO said in June that the India market will increase its investment by 3 billion US dollars.

In July, Amazon's promotion campaign will start in the fashion week.

At the beginning of this month, Amazon has launched the GreatIndianSale in India.

Flipkart has also begun to start discounting sales and advertising, but it has been reduced by investors and the investment promotion is less than Amazon.

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According to people familiar with the matter, the new regulation of electricity supplier is only temporarily allowing Amazon to stop investing in discount and advertising.