2016 was already a strange enough year, but now it’s become stranger still – Flipkart is now complaining that Amazon India is copying everything from them.
“Copying us,” said Kalyan Krishnamurthy, Flipkart’s head of advertising and commerce platform, when asked about the rapid strides Amazon has made over the last year. Krishnamurthy was speaking at a joint interview with Flipkart CEO Binny Bansal. “We came up with the construct of BBDs, they copied that. When we have a bank offer, they have it as well.” he added. “They copy everything, or they wait for someone from somewhere to tell them what to do. Just by pouring money into the market you cannot get anywhere.”
Krishnamurthy should know a thing or two about pouring money into the market, and not getting anywhere – Flipkart has raised over Rs. 24,000 crore so far, and pumped most of it into wooing Indian customers through discounts and promotions. It worked well for a while – through its financial might, Flipkart was able to push aside small mom and pop stores, retailers, and other online firms to emerge as India’s largest online shopping destination. Then Amazon entered the country in 2013, and by most accounts, is now beating Flipkart at its own game.
Flipkart, unsurprisingly, doesn’t seem to be as much of a fan of fast, cash-powered growth any more. “Cash is like a drug, and when you start solving problems with cash you get addicted to it. It’s hard to get out of that addiction,” says CEO Binny Bansal.
But the allegations of copying have put a shiny spotlight on one of Indian startup world’s uncomfortable truths – Flipkart, India’s most valuable startup, and the the pride of its ecosystem, is heavily inspired by Amazon, the company that it is now accusing of copying it.
Amazon had been one of the pioneers of online commerce, starting its operations all the way back in 1994. Flipkart was founded in 2007, and has tread an uncannily similar path to its American competitor. Indeed, its genesis probably owes much to Amazon – founders Sachin Bansal and Binny Bansal were software engineers at Amazon India, when they quit to strike out on their own in the e-commerce space.
Flipkart’s go-to-market market strategy was also uncannily similar to Amazon’s – like Amazon, Flipkart started its store by selling books. Books are a great product to start an e-commerce business with – they don’t have problems of variants like clothes, and are relatively low value, so as to not scare away first time customers. Flipkart clearly understood this strategy of Amazon’s, and replicated in India.
Several of Flipkart’s product innovations, too, seem to be heavily inspired by Amazon. In 2012, Flipkart had launched Flyte, its online music store; Amazon had launched Amazon MP3 in 2007. In 2013, Flipkart launched its ebooks product; Amazon had launched its Kindle store in 2007. Both of Flipkart’s products, though, have since shut down, while Amazon’s original versions continue to thrive. And there are reports that Flipkart was inspired by Amazon’s HR practices – Flipkart had apparently copied a 2 year old Amazon Job Description for its hiring process.
All this doesn’t take away from Flipkart’s execution in India. It moved fast, and successfully negotiated the country’s vagaries to build a successful, mainstream e-commerce company. In one of its biggest achievements, it was the first company to take Cash on Delivery mainstream; but it wasn’t the first – Indiatimes was accepting COD orders years before Flipkart. And while it has made product innovations that have no parallels at Amazon, they haven’t done as well. Both Ping, its social chat product, and its image search product, which were launched with much fanfare last year, have since quietly been shuttered. Its bold app-only strategy, which both Amazon and Snapdeal had publicly spoken against, has also been shelved.
And this isn’t the first time in recent months that Flipkart has attacked its rival for somewhat controversial reasons. Earlier, Flipkart Executive Chairman Sachin Bansal had said that India needs foreign capital, but not their companies, and had asked for greater protection for Indian firms from larger foreign competitors.
Flipkart’s clearly uneasy with Amazon’s growth in recent months. But unsubstantiated attacks on Amazon aren’t helping its image one bit – its latest comments have been met with much eye-rolling and derision from the startup community. Flipkart is India’s flagship startup – it would do well to battle Amazon on products and marketshare, than on appeals to nationalism and plagiarism.
[The views expressed here are those of the author and don’t necessarily reflect the views of OfficeChai.]