AMAZON vs.

FLIPKART:
A Shade Close
Or A Shade
Apart?

VANYAA KANSAL TANYA

BMS 2C BMS 2B
18182 18170
SHAHEED SUKHDEV COLLEGE OF
BUSINESS STUDIES
UNIVERSITY OF DELHI

Submitted on:
25 March 2020
ABSTRACT

In earlier times, people were apprehensive of making online purchases and instead preferred
to shop from physical stores. But with changes in time, demand and circumstances and the
advent of technology, customers started opting for shopping products and services of all
kinds on the Internet, thus saving their time and resources and increasing convenience.
Owing to the booming success of online retail, numerous platforms compete with each other
in this monopolistic market. In India, Amazon and Flipkart hold the largest market share of
these online platforms. In this paper, we try to determine the leader of the online shopping
segment by drawing a comparison between the two, finding the points of deviation and
analysing the key areas that a business must focus on to emerge as a market leader. Primary
data has been collected from over 200 respondents. Respondents aging between 16 - 80
years of diverse backgrounds took part in the research. The data collected from the sample is
analysed and interpreted in 3 significant segments trying to capture awareness levels,
consumer preferences and shopping behaviour of the population in general. Demographics
are found to have a significant impact on purchase behaviour and Amazon is found to be
preferred over Flipkart in terms of most variables studied.
Keywords: Amazon, Flipkart, consumer preferences, primary data, online shopping platforms,
product, service, consumer awareness

INTRODUCTION
Over the past couple of years, online shopping platforms have grown rapidly. In the
present digital era, customers are more inclined towards buying from online retail
stores with just a click, rather than hopping from one physical store to another. One
can find everything online - from a needle to a wedding dress, from daily essentials
to furniture. Owing to this tremendous change in trends, in the past couple of years,
many new e-commerce platforms like Paytm Mall, Shopclues, Snapdeal, eBay etc.
have come up to compete and capture the online shopping markets. Without a
doubt, Amazon and Flipkart are the two biggest e-commerce platforms amongst all
that hold the maximum market share of the online shopping business in India. 

Flipkart
Flipkart was founded in 2007 as a Bengaluru-based company by Sachin and Binny
Bansal, former Amazon employees. It started as an Indian online bookstore but soon
expanded into fashion, essentials, and other lifestyle products. In the past couple of
years, it has undergone a lot of changes. It acquired online fashion retailer Myntra in
an estimated Rs.2000 crore deal in 2014. Through Myntra, it acquired Jabong,
Indian fashion and lifestyle e-portal for about $70 mn. This online retailer holds a
31.9% market share of India's e-commerce industry as of 2018 after Walmart
purchased 77% stake for $16 billion in the world’s largest e-commerce deal. 

Amazon
Amazon was founded in the year 1994 in Washington, US, by Jeff Bezos. It first
entered Indian markets as Amazon.in in the year 2013. In July 2014, Amazon
invested about $2 billion in India to expand its business, after Flipkart, its most
significant Indian rival, announced $1 billion in funding. In a short period, Amazon
has captured a large portion of the Indian market. As of 2018, Amazon holds about a
31.2% market share of India's e-commerce industry.
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 Looking at the neck-to-neck race between these arch-rivals, we wished to investigate
the differences, if any between the two in terms of customer preference, product-
service baskets, cost-revenue strategies, advertising and marketing. In order to gain
a better understanding of the factors that determine the sales of online retailers, we
decided to analyse which of the two is inching closer to the finish, which one the
consumers prefer and why. This study will help us identify the key factors which a
business must focus on in order to maximise its market share and ensure its long-
term success. It will also help us identify the problem areas of the platform which is
lagging behind so that the firm can take key decisions to resolve those issues and
re-emerge as an equal or leading market shareholder.

REVIEW OF LITERATURE:-
 According to [CITATION Kiran16 \l 16393 ], today consumers have a wide variety
of options available online with respect to the number of product categories, number
of products under one category, payment options, discounts, special sales deals etc.
After being attracted towards stationery, apparels, shoes and electronics, consumers
have now accepted buying grocery, fruits and vegetables online too.
 [ CITATION And94 \l 16393 ] have shown that customer satisfaction is a leading
factor in determining brand loyalty. [ CITATION And03 \l 16393 ] found that both trust and
perceived value, as developed by the company, significantly accentuate the impact
of satisfaction on e-commerce services. These are determined by certain strategic
factors which are its Product Quality, Service quality, Order and Delivery, Payment
Modes, Website Inference and After-sales service, among many others [CITATION
DrKumar19 \l 16393 ].
 [ CITATION VAI17 \l 16393 ] revealed that the youth prefer a mobile app for
shopping, and Flipkart is the most popular followed by Amazon. Most students use
online platforms to shop for electronic goods and clothes. As far as gender
differences in the pattern of shopping are concerned, the females prefer to shop
online once a month more as compared to males.
 According to [ CITATION Ric12 \l 16393 ], income as one of the variables of a
demographic factor doesn’t impact online shopping in the Indian context. Also,
females are more impulsive buyers than males and are more likely to be attracted to
the promotional schemes offered by the online retailers, therefore buying more
frequently.
 The result of a study by [ CITATION Haq12 \l 16393 ] shows that the perception of
online shoppers is independent of their age and gender but not independent of their
qualification & gender and income & gender. This means that qualification and
income combined with gender impacts online shoppers, and income & gender has a
mixed effect on individuals.

RESEARCH OBJECTIVE:-
Primary Objective: To determine the leader of the online shopping segment in the
Indian market by drawing a comparison between Amazon and Flipkart, finding the
sources of deviation and suggesting the key areas that a business must focus on in
order to emerge as a market leader.
Secondary Objectives:-
 To study the demographics of customers who shop online
 To study the consumer preferences between Amazon and Flipkart based on
certain key variables
 To study their relative market share in the online shopping segment of India
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RESEARCH HYPOTHESIS - Descriptive
H0: There is no significant difference between consumers’ preferences for Amazon
and Flipkart
H1: There is a significant difference between consumers’ preferences for Amazon
and Flipkart

RESEARCH DESIGN:-
Descriptive Research: This survey-based research is descriptive in nature which
aims to systematically describe the population under study and draw conclusive
research regarding Amazon and Flipkart using a combination of measurable
qualitative and quantitative variables of online shopping which affect consumers’
satisfaction. The information can be organised, categorised and tabulated into 3
major segments using multiple visual and statistical aids.

Sampling and Data Collection: This study uses primary data which was collected
through a structured online questionnaire (Google Forms). It uses a combination of
variables to collect first-hand data from a sample size of 215 respondents from a
sample region of Delhi-NCR between the age-groups of 16-80 years. The
respondents were approached on the basis of Convenience Sampling method and
only those respondents were chosen who shop online, and have used both Flipkart
and Amazon at least once.

Methods of Data Analysis: This research paper using statistical software packages
such as MS Excel and SPSS to calculate various statistical values for data analysis
and comparison. The values and methods calculated include frequency, arithmetic
mean, standard deviation, variance, percentage, Chi-Square test, Z-test and
correlation.

INTERPRETATION OF DATA:-

The data analysis and interpretation is divided into three major segments, the first
being the demographic profile of the respondents, the next being general information
about online shopping behaviour, and the final one is where an exhaustive
comparison is drawn between consumer preferences and satisfaction derived from
Amazon and Flipkart with respect to various key variables and parameters.

{PART 1} – DEMOGRAPHICS

1. GENDER:-

Gender Frequency
Male 98
Female 117
Total 215

3
 Table 1 Figure 1

Table 2

The p-value of Chi-Square test of Goodness of Fit is obtained as 0.197, which is

greater than our assumed Alpha value of 0.05. Hence we conclude that there is no
significant difference between the number of male and female online shoppers.
[ CITATION Haq12 \l 16393 ]

2. AGE:-

Age group (yrs) Frequency

Under 20 47
20-30 38
30-45 68
45-60 55
Above 60 07
Total 215 Table 3
Figure 2

Table 4

The p-value of Chi-Square test of goodness of fit is found to be 0.00, which is less
than our assumed Alpha value of 0.05. Hence we conclude that age does have a
significant impact on the online shopping behaviour of Indian consumers [ CITATION
Ric12 \l 16393 ]. Statistics of the collected sample reveal that most customers who
shop online are in the age group of 30-45 years, followed closely by those between
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45-60 years and those under 20 years. The least number of online shoppers are the
people above 60 years of age.

3. LEVEL OF INCOME AND PROFESSION:-

Income level Frequency

(Rs./month)
Not Applicable 98
Upto 50,000 18
50,000-1,00,000 39
1,00,000-2,00,000 35
Above 2,00,000 25
Total 215

Table 5 Figure 3

Table 6

Profession Frequency
Employee 96
Self-employed 15
Student 74
Home-maker 26
Others 4
Total 215
Figure 4 Table 7

The p-value of Chi-Square test of goodness of fit is found to be 0.00, which is less
than our assumed Alpha value of 0.05. Hence we conclude that income level does
have a significant impact on the online shopping behaviour of Indian consumers
[ CITATION Ric12 \l 16393 ]. Statistics of the collected sample reveal that most customers
who shop online are students who do not earn a regular income. There is no
significant difference between the number of shoppers earning between Rs.50,000-
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1,00,000, Rs,1,00,000-2,00,000 and above Rs.2,00,000/-, most of them being
employees. The least purchase behaviour is witnessed from persons earning less
than Rs.50,000/- per month.

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 {PART 2} – GENERAL INFORMATION

1. FREQUENCY OF SHOPPING ONLINE:-

Online Shopping Frequency

Everyday 2
2-4 times a week 22
Once a week 25
Once in 2 weeks 38
Once a month 53
Once in 2-3 months 47
Once in 6 months 21 Table 8
Figure 5

Table 9

The
Chi-Square analysis of goodness-of-fit displays a p-value of 0.00, which is a smaller
significance than the assumed Alpha level of 0.05. This reveals that there is a
significant difference among the frequency with which different respondents order
online. The pie clearly shows that maximum respondents shop online roughly once a
month, narrowly differing from those purchasing once in 2-3 months. Very few
people i.e. hardly 1% of the respondents make online purchases on a daily basis
[ CITATION She20 \l 16393 ]. This evidently shows that a lot of people are still not entirely
comfortable in making their regular purchases online, and still prefer going to retail
stores to fulfil their daily needs [ CITATION VAI17 \l 16393 ].

7
 2. NATURE OF PRODUCTS PURCHASED ONLINE:-

Categories Frequency
Books and Stationery 83
Clothes and Apparel 138
Fashion and Beauty 83
Sports 59
Electronics and 104
Appliances Table 10
Home, Kitchen and 71
Lifestyle
Kids’ and Baby 30
Products
Grocery, Food and 79
Household
Other 4

Figure 6

Table 11

Respondents selected multiple product categories which they shopped for online
[ CITATION Kal15 \l 16393 ]. The p-value obtained from the Chi-Square test of goodness-
of-fit is 0.00, which is lower than our assumed Alpha level of 0.05. Hence we can
claim that there is a significant deviation among the number of people purchasing
various categories of products from online platforms [ CITATION Aro17 \l 16393 ] . The bar
chart displays that maximum respondents (66.3%) purchase clothes and apparel
from online shopping portals, followed closely by 50% respondents shopping for
electronics and appliances.
Not much difference is observed in the number of people preferring to buy books and
stationery, fashion and beauty products, grocery, food and household items, and
home kitchen and lifestyle products, all of them ranging between 34-40% [ CITATION
Kal15 \l 16393 ]. Apart from the miscellaneous category, the category chosen by the
least number of respondents is Kids and Baby Products, which subtly highlights a
disadvantage of online shopping people may perceive, that one cannot be sure
about the quality, feel and authenticity of products available online, due to which
most parents may be a little apprehensive in purchasing items for their infants and
younger children.
3. PREFERRED ONLINE SHOPPING PLATFORM

Online Platform Frequency

Amazon 42
Flipkart 13
Both 153 8
 Table 12

Figure 7

This data attempts to judge the popularity of Amazon and

Flipkart based on preferences of the respondent consumers. The figures show that
also 3/4th of the sample makes online purchases from both Amazon and Flipkart,
thus verifying the purpose of this study. Out of the remaining persons, 80% people
shop only from Amazon and only 20% people choose Flipkart alone.

{PART 3} – THE COMPARISON

1. AWARENESS OF SERVICE OFFERINGS:-

Respondents were shown an exhaustive list of additional services offered by both
Amazon and Flipkart, and were asked to select the ones they were aware of,
irrespective of whether they had used them all or not. Respondents choose multiple
options to answer this question.

(a) Amazon:-

Figure 8

The bar chart above displays the number of persons who selected each listed
service. ‘Amazon Prime Video’ proved to be the most popular service with over 79%
respondents being aware of it. Following closely were ‘Amazon Prime Music’ and
‘Amazon Pay Wallet’, with about 70% awareness levels. In contrast, Amazon GO
proved to be the least well-known, with just about 19% respondents having heard of
it. On the whole, about 58% of respondents are aware of all the additional services
offered by Amazon.

9
 (b) Flipkart:-

Figure 9

The bar chart above displays the number of times each service was selected by a
person. Leading proudly was ‘Flipkart Money’ which proved to be the most popular
service with over 49% respondents being aware of it. However, ‘Flipkart Ideas’
proved to be the least well-known, with just about 23% respondents having heard of
it. The other services did not differ much in their levels of popularity, all falling
between 31-37% awareness. On the whole, about 35% of respondents are aware of
all the additional services offered by Flipkart.

 Analysis:-

Table 13

On
performing a Chi-Square test of goodness-of-fit on the overall awareness levels of
Amazon and Flipkart, the p-value observed was 0.017, which is less than our
assumed significance level (Alpha) of 0.05. Thus, we have sufficient evidence to
claim that there is a significant difference between awareness levels of the two
platforms. Hence, consumers are generally more aware about the services offered
by Amazon, as compared to those of Flipkart.

2. OVERALL USER EXPERIENCE:-

In order to record and compare the overall experience of customers with Flipkart and
Amazon, a 5-point Likert Scale was developed. Respondents were made to select
their degree of satisfaction ranging from 1-5, with 5 being the highest and 1 being the
lowest. The responses have been pictographed into the following bar chart.

10
 (a)

Figure 10

(a) Amazon:-
Table 14

The bar graph shows that maximum respondents selected a satisfaction level of 4,
with level 5 inching closely behind. The mean score of 4.06 represents that on an
average, the overall experience of respondents from Amazon was pretty good.
The standard deviation value is quite low, which shows that most of the values lie
close to the mean, hence the general satisfaction of most of the respondents is
good. About 2% of the respondents fall under outliers and do not represent mean
and standard deviation since their overall experience was either extremely good or
extremely bad.

(b) Flipkart:-

Table 15

The bar graph represents that maximum respondents gained a satisfaction level of 4,
with not much of a difference from those who selected level 3. The mean score of
3.522 represents that the overall experience of the respondents has been above
average. The standard deviation is quite low, which shows that most of the
responses lie close to the mean, hence the general satisfaction of most respondents
is similar.

11
About 3.25% of respondents are outliers and do not represent mean and standard
deviation since their overall experience was either extremely good or extremely bad.

12
  Analysis:-
In case of both Amazon and Flipkart, maximum respondents chose 4 on the rating
scale. However, a major portion of respondents chose 5 on Amazon while choosing
3 on Flipkart. This shows that responses of Amazon are skewed more towards the
right as compared to Flipkart. The two-sample Z-test was then applied to compare
the significance of the difference between the two means, using the formula below.

Equation 1

On substituting the computed values into the formula, the calculated Z value came to
6.505, while the tabulated Z value at our assumed significance level (Alpha) of 0.05
is 1.96. As Zcal > Ztab, we have sufficient evidence to claim that there is a significant
difference between the two means. Hence, the overall experience of Amazon is
significantly higher than that of Flipkart.

3. PREFERENCES OF INDIVIDUAL VARIABLES:-

On arriving at overall figures and achieving a significant deviation, our aim

was to analyse several key variables which affect a consumer’s choice of
preference, to identify the sources of such deviations so that necessary
managerial action can be taken using the principle of Management by
Objectives [ CITATION Jai11 \l 16393 ] . Respondents chose their preferred
platform against each variable, and selected ‘No Preference’ in case they
were indifferent between the two.

(a) Product Quality:-

Product Quality

Product collection and variety

Stock availability
Amazon
Flipkart
Least damages and defects No preference

Range of products and brands

Exclusive products during sales (Amazon's Great Indian Sale, Flipkart's Big Billion Days)

0 20 40 60 80 100 120

Figure 11

In order to judge which platform respondents preferred in terms of product quality,

the variable was divided into certain sub-variables namely product collection and
13
variety, stock availability, least damages and defects, range of products and brands
and exclusive product offerings during sales. These factors together help a
consumer decide about the overall quality of products offered.
The bar chart clearly depicts that for each sub-variable, consumers chose Amazon
by a much wider margin over Flipkart and there were very few respondents whose
opinion did not differ among the two platforms. Hence, in terms of Product Quality,
Amazon is the clear winner.

(b) Customer Service:-

In order to judge
Customer Service which platform
respondents
preferred in terms of
Returns, refunds and exchanges
customer service,
the variable was
Amazon
Flipkart divided into certain
After-sales services No preference sub-variables
namely returns,
refunds and
Responsiveness of customer care
exchanges, after-
sales services and
responsiveness of
0 10 20 30 40 50 60 70 80 90
customer care.
These factors
together help a consumer decide about the overall level of convenience through
services offered.

Figure 12

The bar chart clearly depicts that for each sub-variable, consumers chose Amazon
by a much wider margin over Flipkart, and about 25% respondents were indifferent
between them. Hence, in terms of Customer Service, Amazon gets a distinct edge.

14
 (c) Order and Delivery:-
In order to judge the platform of choice with regard to order and delivery, the variable
was divided into certain sub-variables namely timely order delivery, effective tracking
system, packaging and transportation, and geographical reach. These factors
combined help a consumer decide their general preference about the order and
delivery segment of any online shopping platform.

Order and Delivery

Timely order delivery

Effective tracking system

Packaging and transportation

Geographical reach

0 10 20 30 40 50 60 70 80 90

No preference Flipkart Amazon

Figure 13

The bar chart reveals that for each sub-variable, quite a large proportion of
respondents were indifferent among the two platforms. However, consumers chose
Amazon by a much wider margin over Flipkart. Hence, in terms of Order and
Delivery, Amazon bags the top position.

(d) Payments:-

Payments

Offers, vouchers and discounts

Variety of payment options and gateways

Least payment defaults

0 10 20 30 40 50 60 70 80

No preference Flipkart Amazon

Figure 14

In order to judge which platform respondents preferred in terms of smooth payments,

the variable was divided into certain sub-variables namely offers, vouchers and

15
discounts, variety of payment options and gateways, and least payment defaults.
These factors together help a consumer decide about the overall convenience of
payments while shopping online.
While close to 40% respondents were indifferent between the Amazon and Flipkart,
the bar chart depicts that for each sub-variable, consumers chose Amazon by a
much wider margin over Flipkart. Hence, in terms of Payments, Amazon overtakes
Flipkart.
(e) Web
Web Interface Interface:-
Smooth usage across devices

Accurate product information

Effective search results and recommendations

Sorting, filtering and carting

Product and price comparisons

App speed and traffic

Feedback, reviews and ratings

0 10 20 30 40 50 60 70 80

No preference Flipkart Amazon

Figure 15

With the aim to judge the respondents’ preferred platform in terms of web interface,
the variable was divided into certain sub-variables namely smooth usage across
devices, accuracy of product information, effective search results and
recommendations, sorting, filtering and carting, product-price comparisons, app
speed and traffic, and feedback, reviews and ratings. These factors together help a
consumer decide their overall preference regarding the usage of web interface.
The bar chart clearly depicts that for each sub-variable, consumers chose Amazon
by a much wider margin over Flipkart, and about 30% respondents were indifferent
between them. Hence, in terms of Web Interface, Amazon is the clear winner.

16
 (f) Other
Other Offerings
Memberships and premium offers/subscriptions

Advertising and marketing

Service retailing: Movie and tickets

Recharges and bill payments

0 10 20 30 40 50 60 70 80 90

No preference Flipkart Amazon

offerings:-

Figure 16

With the purpose of judging the platform of choice with regard to other retail and non-
retail offerings of online shopping platforms, the variable was divided into certain
sub-variables namely memberships and premium offers/subscriptions, advertising
and marketing, service retailing (movie and tickets), and recharges and bill
payments. These factors combined help a consumer decide their inclination towards
either one of the platforms in terms of other offerings.
The bar chart reveals that for each sub-variable, quite a large proportion of
respondents were indifferent among the two platforms. However, consumers chose
Amazon by a much wider margin over Flipkart. Hence, in terms of Other Offerings,
Amazon bags the top position.

CONCLUSION
Now more than ever, Amazon and Flipkart are both competing to capture the Indian
markets and are doing everything they can to attract loyal customers. The main
objective of the paper was to draw a comparison between Amazon and Flipkart by
analysing and interpreting the primary data collected. On studying the demographic
profile of the respondents, we conclude that there is a significant impact of age and
income on the buying behaviour of an individual, but not of their gender.

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A general study of respondents’ choices showed us that consumers in general,
prefer Amazon over Flipkart to shop online. To find the source of such deviation, the
key variables used for comparison were product quality, customer service, order and
delivery, payments, and web-interface. Their evaluation reveals that a customers’
buying behaviour is influenced by his experience over various dimensions on the
interface throughout the process, beginning with searching for a product/service up
until the order is placed and payment is made.
The above analysis gives us sufficient evidence to reject the null hypothesis. This
means that there is a significant difference between consumers’ preferences for
Amazon and Flipkart. Although Amazon is an international chain and Flipkart is
focused only on India, yet Amazon seems to enjoy a higher rating in terms of
popularity and trust. Amazon stands better than Flipkart against all the key variables.
In terms of awareness about the services provided by both, Amazon’s services are
much more known, whereas people are slightly less aware of Flipkart’s services.
While the current market share of both the firms are not too different, Flipkart needs
to step up its sales and awareness through aggressive advertising and marketing in
order to remain competitive with Amazon in the long run, else Amazon shall steal the
limelight and Flipkart may shadow out.

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