MUMBAI (NewsRise) -- Amazon.com topped India's e-commerce market last financial year, selling more merchandise than its local rival Flipkart Internet, Barclays said, even as concerns deepen about mounting losses at the two companies locked in a high-stakes battle for market share.
According to Barclays, Amazon clocked $7.5 billion in gross merchandise volume in the year ended in March, compared with $6.2 billion at Flipkart. The figures of Flipkart exclude its fashion arms Myntra and Jabong. When these units are included, the companies stood neck-and-neck in their sales volumes.
Flipkart continued to lead with a revenue of $3.8 billion during this period, compared with Amazon's $3.2 billion, Barclays said. But the pace of growth at Amazon was almost double that of its rival.
Rejecting Barclays' findings, Flipkart Wednesday said as a group, the company is almost double that of its nearest competitor, which it didn't name.
"Our work over the years and especially in the past two years suggest that Flipkart is way ahead both in terms of revenue and market share," a spokeswoman for Flipkart said in a statement. However, she declined to comment on the report. A spokeswoman for Amazon too declined to comment.
Amazon's expansion in India underscores the surging growth of the internet in the south Asian country that is home to more than 430 million internet users and 320 million smartphones.
Still, widening losses amid rising investments and discounts cast a shadow on their growth. According to Barclays, both Amazon and Flipkart are staring at operating losses worth $1.5 billion each next year.
Amazon, with its deep pockets and ambitious $7 billion outlay for India, has been neck-and-neck with Flipkart in the race to dominate the country's e-commerce market. Its growth in the last few years has been driven by the surging growth of its wholesale unit after a regulatory change in 2016 curbed e-commerce companies from having more than 25% of its merchandise volume from one single vendor.
The rule dealt a blow to Flipkart Internet, an early entrant which grew mainly on the back of sales from its wholesale unit, Barclays said. On the other hand, the rule gave a fillip to Amazon, which saw its relatively smaller wholesale unit ramp up during this period, it added.
In the past one year, Amazon has been consolidating its operations in India, bulking up the groceries and household products business which it expects to account for more than half of its operations in the country in the next five years.
Last year, it bought a 5% stake in local departmental store chain Shopper's Stop. In September, it bought a small stake in supermarket chain More that has hundreds of stores across smaller towns and cities. According to local media reports, the company is inching closer to a deal to pick up a 10% stake in Future Retail, India's largest retailer.
The company has also been beefing up its Prime subscription service, adding hundreds of thousands of products daily, including the launch of a video streaming business that is gathering steam thanks to inexpensive data tariffs.
While Flipkart too has been investing in new initiatives, including launching a loyalty program for its customers and building up its advertising business, a string of management changes clouded the company's prospects.
In May, Walmart picked up a 77% stake in Flipkart for $16 billion, marking the U.S. company's largest-ever deal. Soon after the announcement, Flipkart's co-founder and then Chairman Sachin Bansal left the company. Earlier this month, Binny Bansal, the other founder and chief executive, stepped down, following allegations of serious personal misconduct.
Walmart now plans to merge Myntra and Jabong with Flipkart.
--Dhanya Ann Thoppil