Flipkart vs Snapdeal : Online Battle Heats Up

When the Summer of 2015 descends and mercury dips down there is one imminent nostalgic battle between Flipkart and Snapdeal which can heat up the market place of Indian e commerce industry. This battle of two major domestic online player has all the spices from sledging each other to greater and better deal to customers. None of the two player are ready to back out in face to face battle in Indian market. It is remarkable to observe in India, very rarely two business houses have rubbed against each other openly but that aggression is no more missing out. Can it match iconic Pepsi vs Cola like war back at home or even outdo that, will be interesting to watch out. 

It is difficult to predict when and how the rivalry broke out but the kind of industry and competition they are into it is natural to keep each other at bay. This strategy has another advantage of getting more eyeballs from customer thus giving minimal room to the rest players from the clash of titans. The era of ambush marketing is out in open, at least in online marketplace. 

When Snapdeal Co Founder Rohit Bansal lamented the shortcoming of software engineers in India for the kind of programming he wanted, Flikart Co Founder and CEO took no time to buzz him off through twitter. Sachin directly hit out at Rohit for not finding the right talent and termed this as failure of Snapdeal to mine the talentpool.   

#AchhaKiya Trolling

When Snapdeal trolled Flipkart on #AchhaKiya campaign, in all probability it would have left Flipkart heartburn as Snapdeal suddenly caught the attention and the whole campaign of Flipkart was reeling under trolling pressure. 

 For readers who may be unaware of , #AchhaKiya was a big bang marketing campaign of Flipkart, In June this year Flipkart launched  Achha Kiya campaign on Television, Print Media and Social Media with a message "Nahi Khareeda, Accha Kiya" (Didn't Buy, good for you) 

So the campaign was all about telling customers that your wait pays if you didn't buy. This was a covert campaign launched by Flipkart with scheduled teasers to excite customers. In any good weather days, it would have been a great campaign to lure the customer. But the excitement of Flipkart was short lived as Snapdeal hit back swiftly on campaign rhyming Achha kiya bata diya, #YahanSeKharido (Good that you told, Buy from here). 

                                                                           

And Snapdeal Trolling was not limited to Social Media but it went out it open, challenging Flipkart billboard and placing it's hoarding just below the Flipkart ad teasing customer even more. Not to disappoint Flipkart marketing team but Snapdeal won this round with applause. Prior to this Snapdeal had also poked at Flipkart during Big Billion Sale and asked customer to check at Snapdeal before they buy at Flipkart. 


Online Market Place Positioning 

Based on GMV if we try to analyse the Indian e-tailers, Flipkart is obviously No. 1 for the time being and will continue to do so in near future as well. Flipkart is estimated to have mopped up over $3.5 Billion of funding from investors where as Snapdeal estimate is $1.75 Billion as funding received.

In terms of valuation Flipkart is growing at CAGR of 150% in last 3 years and GMV is growing at 250%. In last 3 years time Flipkart GMV has grown 50 times and by end of 2015 Flipkart targets to touch $ 8 Billion in GMV.

On the growth trajectory Snapdeal has also charted similar path albeit on smaller value if compared to its home gown rival. Snapdeal GMV in last 4 years has grown by 566% and valuation by 145%. Snapdeal at its current pace may end up at $3.5 in sales based on GMV.

Since neither of the companies in E Commerce are yet profitable So the parameter to judge them can only be on GMV. Gross Merchandising Volume or GMV is total sales value of merchandise sold through the marketplace. So until the profit hits the industry the GMV can be used as yardstick to judge the marketplace.

Festive Rivalry

In it's tradition to keep Flipkart bemused, recently in an interview Snapdeal CEO Kunal Bahl claimed to dethrone Flipkart from Number 1 position by March'16. It was certain to cause unease in Flipkart which assertively hit back by ruling out any such feat by Snapdeal or by any other etailer. Flipkart termed the marketplace as no competition by claining any retailer can not even touch half of the sales of flipkart by March'16

Flipkart will sell goods worth $10 billion (Rs 65,000 crore) during fiscal 2016, and "nobody will be even half of that", the company's head of commerce Mukesh Bansal told ET. "There is not a shred of doubt based on all the market numbers we have today."

Earlier Kunal Bahl said  "The one thing I am very, very clear about right now is that I think we're going to be No. 1 (in terms of sales) by March 2016," in an exclusive interview with ET. "I think we're going to beat Flipkart by then."

Analysing the current market position and growth trajectory of both companies it looks unlikely that Snapdeal displaces Flipkart so soon and so easily. But what makes Kunal Bahl to claim this openly. This time it definitely was not a satire like "Big Billion Day" or "Achha Kiya" trolling. So what was it ?
Though Snapdeal CEO didn't disclose how he is going to beat Flipkart in sales value but it is imperative his bet is high on the sales added by recently acquired Freecharge. Mobile recharge space which is highly dominated by Paytm can be a game changer for Snapdeal if it is executed in right way. The category of fashion apparels/electronics/home furnishing falls in shopping needs but mobile recharge and bill payment is need of every mobile user. So decoding this segment could fuel GMV of Snapdeal beyond the projections done by most analyst. 

In his interview to ET Mr Bahl also took pot shot on Myntra App Only decision of Flipkart terming it consumer unfriendly idea ever. 

So, on advent of festive season when they sit in boardrooms deciding the strategies to win over the customer they will have to piece together the ideas which at the same time can win consumer mind space. The mindgame will continue to boost the marketplace from print media to social media. The masculinity and the feminism together will hold keys to make winner but one thing is sure customers are going to get good spoons of discount as well as entertainment when Snapdeal and Flipkart muscles it out in open.
All The Best