Amazon and Flipkart are vying for a bigger share of India's e-commerce market

In India, e-commerce giants Amazon and Flipkart are competing at a breakneck pace in offering good prices.

According to an analysis by US brokerage firm Jefferies, for lower value goods (priced below Rs 2,000), the platform fees charged by the two e-commerce giants differ by less than Rs 50. And when it comes to high value goods (priced above Rs 10,000), the platform fees charged are less than 1% of the order value.

Jefferies' research note highlighted that they found that Flipkart charges lower fees than Amazon India in certain major categories . However, the local e-commerce giant has a relatively "complex" commission structure , in which most of its categories have different fee rates depending on the pricing tag .

On the other hand, despite having a higher fee rate than Flipkart, Amazon has a more uniform approach to its commission structure across most categories, which is easier to understand.

The report also added that although Flipkart charges a lower commission rate, it makes up for it by charging 2% fee on the order value.

Amazon and Flipkart both have their own pricing structure, which is broadly divided into commission, shipping, service/collection, and other related fixed fees. Here, a commission or referral fee is charged to online sellers for using the marketplace . Moreover, the fees involved in this space vary depending on the product category and pricing. For example, electronic products usually only charge a low commission of 3-5% , while eyewear charges at least 10-16% commission.

Finally, the report highlights that among all major categories, consumer electronics is the most important from a gross merchandise value (GMV) perspective, contributing a whopping 40% to the overall Indian e-commerce industry in FY20.

So while smartphone devices attract only 7% of users, the lowest among all other product categories , the unit value of mobile phones is very important for the platform . In contrast, fast-moving consumer goods or basic staples or low-value categories attract 15-30% purchase rate, but they are also more expensive to store and transport.

All in all, both Amazon and Flipkart are offering similar prices in their fight for a larger share of the Indian e-commerce market ! Now, it remains to be seen what the future holds for these two giants in the Indian e-commerce space.

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