Flipkart-Amazon Battle Pits Murthy Against Premji

IT czars Azim Premji and Narayana Murthy are now rivals in a different sector: e-retail. And soon they could face another rival in former Tata Group chief Ratan Tata.

Tata Sons Chairman Emeritus Ratan Tata recently said that e-commerce is one of the areas where is he looking to personally invest because of its "good potential" as a large proportion of the country's consuming public do not have the required access to goods.

Wipro founder and chairman Azim Premji through his investment company Premji Invest is an investor in domestic e-tailer Snapdeal. Mr Premji has also invested in fashion e-tailer Myntra, which was recently acquired by Flipkart.

Infosys co-founder Narayana Murthy already has a venture in e-commerce space. His private investment firm Catamaran Ventures has a joint venture with global retail giant Amazon to help get Indian companies online. Catamaran Ventures partnership with Amazon will help small- and medium-sized firm sell goods online. In June this year, Mr Murthy stepped down as executive chairman of Infosys.

Access to mobile devices and better-quality broadband has boosted India's online shopping scene. Online sales of retail goods totaled $2 billion, or nearly Rs. 12,000 crore, in 2013, according to research firm Forrester. Technopak forecasts sales are expected to reach $76 billion (Rs. 4.56 lakh crore) by 2021.

This has boosted excitement in the Indian e-commerce sector. Flipkart, India's largest e-tailer, recently raised $1 billion in a fresh round of funding as it tries to aggressively scale up after Amazon.com's rapid expansion in the country has heated up competition. After the funding, Flipkart has been valued at a $7 billion, according to estimates.

Flipkart co-founder Sachin Bansal told NDTV that India can produce many billion dollar internet firms. India's internet ecosystem is going to be one of the most vibrant in the world with half a billion internet users, he added.

Immediately after Flipkart's funding announcement, Amazon said it would be putting in an additional investment of $2 billion into its Indian operations.

Investor interest in Indian e-commerce space could further grow if the government eases foreign direct investment norms. India currently bans global online retailers from selling goods directly to customers but allows them to own 100 per cent of a marketplace business, where third-party suppliers can use their platform. Both Amazon and eBay use such a platform to operate in the country.

Buying Xiaomi Mi 3 is like booking IRCTC tatkal: Why Flipkart exclusive strategy could backfire

Last month, everyone was excited about Xiaomi. A look at the Mi 3 specs and price, and you wouldn’t doubt the frenzy either. The company decided to go the Motorola way and opted for the online distribution model with an exclusive tie-up with Flipkart, rather than setting up a local sales base or its own online retail channel. However, that arrangement hasn’t quite worked as expected. That’s down to the lack of information about availability, Flipkart’s troubles in dealing with heavy traffic and the new registration process that hasn’t gone down well with several shoppers.

The Xiaomi Mi 3 went on sale on July 22, and the company had claimed to receive around 1,00,000 registrations by July 21 itself. Only registered users could buy the device the next day. However, pre-registration didn’t guarantee you a unit, and it only meant you were eligible to buy the phone. As soon as the Mi 3 went live on the site, Flipkart couldn’t handle the traffic and the site crashed temporarily. Within 40 minutes, Flipkart claimed the Mi 3 was out of stock, but the site promptly said it would bring in the next batch on July 29 while the registration would begin on July 28. And to top it all, the second batch apparently sold in five seconds.

It’s third batch sold out at a record less than two seconds. Two seconds may sound unbelievable? This was possible as Flipkart had changed the process for the second batch wherein users simply needed to add the device to their carts, and could make the payment any time later that day.  All the hype has generated one simple question: How many Mi 3 units have been sold so far?

An earlier report by BGR claimed the number to be around 20,000, while Zauba and import-export tracking site, shows that only 10,400 units of Mi 3 units were brought to India on July 25. If these details are to be believed than Flipkart may have put up approximately 10,000 units on sale each of the previous two times. It then put up 15,000 units on sale, and today’s flash sal will see 20,000 units go up on sale. And when it is back in stock next week (which we suspect it will), then we could be in for a re-run of the out-of-stock drama next week too, when the Mi 3 will be back on sale.

It would also be safe to assume that Xiaomi is gauging the response to the relatively new Chinese brand in India and has been cautious about the number of units it has shipped to the country. In that case, the question many are asking is why did the company allow up to one lakh registrations if it had just 10,000 units. It wouldn’t have been able to meet the tenfold demand, anyway. It should also be noted that Flipkart claimed to have around 250,000 potential buyers on the Mi 3 page when the second batch went on sale. So the demand was several times the meager number of units available, if the actual sales figures are true.

Xiaomi is now also being accused of building up the demand, while not being able to deliver. Flipkart has taken criticism for its inability to handle large traffic. Xiaomi has been the biggest loser though, since some users have conveniently opted for another phone through Flipkart after being frustrated with the whole conundrum. This also raises questions about exclusive tie-ups to sell devices and whether they are really worth it, especially given the problems faced by Flipkart during the Moto G sale too. Check out ourMoto G review.

We cannot even say that we didn’t expect this from Xiaomi, which is known for flash sales. It usually reveals the number of units, puts them on sale, and ends up selling them in minutes. It doesn’t use any kind of advertising and relies on its social media channels to reveal the launch dates and other information. Xiaomi devices have got popular by mere word of mouth that spreads through people and social channels.

If it planned a similar strategy for India, then it could begin to annoy users soon. The company has already started receiving flak and negative feedback. For a new entrant trying to form a customer base here, especially considering the growth potential and the saturation of vendors, it better sort out the chinks before its too late.

Moreover, if OnePlus One, yet another Chinese brand with superior specs, manages to nail the price and purchase model, it could further affect Xiaomi’s India dreams.

Read our Xiaomi Mi 3 review, to find out if it is worth buying.

For those who are unable to get their hands on the device, check out our four alternatives to the Mi 3.

Xiaomi partners with Flipkart to launch its smartphones in India

Chinese handset maker Xiaomi is gearing up for the Indian debut in next few weeks. Xiaomi, like Motorola is also teaming up with the e-Commerce major Flipkart to launch its handsets in India. Xiaomi had launched its official website in India earlier this month, announcing its entry into the Indian smartphone market in the next few weeks.

Xiaomi is expected to bring two smartphones in partnership with Flipkart in the next 2-3 months. They added the agreement between the parties is in the final stages and the launch on the online market place will happen next month, reported PTI.

Many handset makers like Motorola and Alcatel are partnering with e-commerce firms to launch their devices exclusively. While Motorola has launched its Moto G, Moto X and Moto E with Flipkart, Celkon had launched its Android Kitkat-powered Campus A35K exclusively with Snapdeal.
Founded in 2010 by serial entrepreneur Lei Jun, the Beijing-headquartered firm has become one of China's biggest electronics companies that designs, develops and sells smartphones, mobile apps and other such consumer items. Other Chinese firms selling its handsets in India include Huawei, ZTE, Lenovo, Gionee and Oppo, the latest entrant.

According to the company's website, it has already sold over 17 million handsets in China. Its portfolio includes devices like Mi 3, Mi Wi-Fi and Mi Box, among others. It launched its products in Singapore in February this year. Earlier this month, the company had also roped in Jabong co-founder Manu Kumar Jain to head its operations in India.

According to research firm IDC, smartphone sales in the country grew almost three-fold to over 44 million in 2013, buoyed by affordable devices made by local firms such as Micromax and Karbonn.

Affordable smartphones, especially those priced in the sub-USD 200 category (Rs 12,000), are doing well. Over the last few weeks, companies have launched handsets like Lumia 630 and Moto G to tap the booming market.