A study of the business models and business strategies of the two big e-commerce players in India: Amazon and Flipkart

Abstract

E-commerce in India is still in its infancy when compared with well-developed nations like US, but it has been growing at a tremendous pace. In recent years, it has grown by almost 35% CAGR from 3.8 billion USD in 2009 to an estimated 12.6 billion USD in 2013. Amidst all this growth, two major e-commerce companies Amazon and Flipkart, have garnered a lot of attention because of their direct rivalry. The fierce competition between the global giant Amazon and the home-bred Flipkart have made headlines recently because of their bid to outdo each other in almost every area, be it billion-dollar investments from investors or capturing the customers through their massive discounts. Their aggressive pricing policies have led to objections from leading manufacturers like Lenovo, Toshiba, etc. Their business models have also raised issues of tax evasion and a call to improve regulations to control e-commerce players in India. Hence we realized that there was a need to study the business strategies of these two companies to understand their future possibilities and probable impact on Indian e-commerce industry. In view of the recent developments in the e-commerce field, triggered by the intense rivalry between the two major e-commerce players in India – Amazon and Flipkart, this project studies and compare their business models and their business strategies in India. This project also analyzes the probable impact of their business strategies on their future and on the e-commerce industry in India as a whole and provides recommendations for Amazon and Flipkart.