Amazon and Indian e-commerce company Flipkart have an interesting history.
Flipkart’s founders both worked at Amazon before ditching in 2007 to start their own new company with a very similar business model. The startup took off and it’s now India’s largest online marketplace in terms of sales.
Amazon, meanwhile, didn’t enter India until 2012 when it acquired price-comparison site Junglee. It opened its official India website in June 2014. The next month, Flipkart raised a mammoth $US1 billion funding round. Exactly one day later, Amazon said it planned to pour $US2 billion into its Indian operations.
The companies’ track-record spurred some friendly fire Friday when Reddit India tweeted a picture of an Amazon box in Flipkart’s HQ. Flipkart had a cheeky reply:
…To which Amazon reminded the company of its roots, which Flipkart had to acknowledge:
This isn’t the first time the company’s have publically duked it out. Last year, Amazon tried to steal Flipkart’s thunder on its “Big Billion Day Sale” by buying the domain bigbillionday.com, to make consumers looking for the sale more likely to stumble on Amazon’s homepage instead. The company also bought ads for the keyword “Flipkart” so people would see its products when searching for Flipkart’s deals, DNAIndia reported at the time.
Funny exchanges aside, international growth is serious business for Amazon. CFO Tom Szkutak said that Amazon was “very excited about India” in the company’s Q4 earnings call, but investors and analysts aren’t impressed with its growth rate abroad.
“International revenue growth continues to be a mystery and is a confusing part of the Amazon story,” analysts at investment firm Stifel wrote in a post-earnings note.
“Could you just help us understand why the international performance is so much weaker?” one analyst asked on Amazon’s Q4 earnings call.
Besides Flipkart, Snapdeal, which has eBay backing, and Jabong are also significant local competitors in India. Winning marketshare in India is big, because the country has the third greatest number of internet users in the world, after China and the United States.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.