Flipkart’s loss is Amazon’s gain; BPL makes a switch to expand its online business

Earlier this week, IOS reported how large appliances are at the centre of attention within the Indian ecommerce industry. The two leaders Flipkart and Amazon are busy with the groundwork for this sales category. One of the key elements for winning in the large appliances category is grabbing exclusive brands/products deals.

In this regard, Flipkart lost one brand partner and Amazon India gained one. Indian electronics company BPL has severed ties with Indian etailer Flipkart and joined its rival Amazon India.

What went wrong with Flipkart?

According to BPL’s Chairman & MD Ajit Nambiar, the company accounted for 12% of large appliances sales on its former online partner Flipkart’s platform. The electronics brand sold products worth over Rs. 175 crore. Then why they parted ways? Because BPL was displeased with the low sales figure and visibility on Flipkart.

BPL’s Head- Corporate Strategy Manmohan Ganesh disclosed, “We terminated the agreement (with Flipkart) because we felt that the brand needed more in terms of exposure, wider range of products, etc. After terminating the agreement, there’s usually a notice period—all that is done and we’ve moved on.”

Explaining their side of the story, Flipkart said that the partnership ended as their expansion plans weren’t aligned with BPL’s business strategy.

Why BPL chose Amazon over Flipkart?

Sensing an opportunity, Amazon India jumped in.  The Indian electronics MNC has formed a long term strategic technology partnership with Amazon. The US-based ecommerce giant would share consumer buying behaviour data with BPL, which would help them to introduce new products and make necessary alterations to the existing ones. Amazon Prime too played a very important role in convincing BPL to join Amazon.

When asked why BPL decided to partner with Amazon India, Nambiar stated, “To sum it up, it was Amazon’s technology and their platform and all the other benefits that you get. Things like Alexa, Prime, etc.—these are things that a lot of Indians are discovering. So, we started talking and the talks went very well. We’re talking about expanding our range—from televisions to washing machines and refrigerators to microwaves, etc… (Amazon) offers so much, so it was a given that we work together and make this happen.”

Flipkart has other brand partners like Samsung and Panasonic that sell exclusive products on the online marketplace. But if other brands too switch the ecommerce boat like BPL, then the home-grown etailer’s grand plans for large appliances would hit a major roadblock. As for Amazon, the etailer would gain immensely from its tie-up with BPL.