Clash of the Titans - Across City Tiers

The festive Sales Period was eventful and a pleasant surprise for both Flipkart & Amazon. There were many news and PR stories with both companies claiming higher growth (2x or 3x) vs. last year, New users from Tier 2 and 3, and higher order values. High discount sales periods that are branded as Big Billion days for Flipkart (and its group companies) & Great Indian Shopping festival for Amazon. This year, the Sales period started on September 21 with both these marketplaces aggressively promoting the Sales period with multichannel campaigns communicating the many benefits – discounts, new launches, exclusive launches, and Make in India products amongst others.

In our earlier blog, we considered only the growth metrics vs. the previous six months and non-sale days within September – Flipkart is the clear winner! 

Now we evaluate from which type of cities the growth actually materialized for these marketplaces. It is a known fact that Flipkart is exceptionally strong in Tier 2 & 3 markets and Amazon has an upper hand in Tier 1 markets. This can be reaffirmed with the Non-Sales Days data of tier-wise contribution. Tier 2 & 3 contribution for Flipkart is about 75% and that is about 15 points higher than Amazon for both order volume and GMV. Similarly, the Tier 1 contribution for Amazon is about 43% and that is about 15 points higher than Flipkart for both order volume and GMV.

Now when we consider the Sales Days – it presents a very interesting picture.

The Tier 2&3 contribution for Flipkart dropped and similarly, the Tier 1 contribution of Amazon also dropped when we consider GMV. The 15-point gap that we saw for non-sale days is now reduced to a 6-point gap for GMV during sales days.

This means that brand loyalty is fickle for consumers. Consumers have chosen the best deals available across platforms and have chosen to maximize their value regardless of the marketplace that they are most familiar with. It also indicates that while typically there is a platform of choice for customers across different city tiers – they are aware and familiar with the competing marketplace – Flipkart in Tier 1 and Amazon in Tier 2&3. Thus both these marketplaces need to figure out drivers to unlock latent equity that they behold with customers across different city tiers. 

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Written by: Anupam Asthana

Date: 21 Oct 2022

Vumonic Datalabs is a global consumer intelligence platform. We provide high-quality, deterministically linked, large structured data that can be used to derive deep consumer,  business, and market insights. Our proprietary data pipelines deliver unbiased actual transaction data collected in a privacy secure manner via large global panels. 

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