Bengaluru: India’s largest online retailer Flipkart is showing early but clear signs of sustaining the turnaround that began with its win over arch-rival Amazon India during the Big Billion Day (BBD) sale in October, belying predictions of many investors and analysts who thought Amazon may run away with India’s $14-15 billion e-commerce market.

Flipkart Internet Pvt. Ltd pulled in gross sales of more than Rs2,600 crore in both December and January on the back of bumper sales of smartphones, said two people familiar with the matter. Amazon (Amazon Seller Services Pvt. Ltd) generated gross sales of roughly Rs2,300 crore, on average, in these months, said two other people familiar with Amazon’s numbers. If sales at Flipkart’s fashion units Myntra and Jabong are included, the company is far ahead of Amazon. Gross sales reflect the value of goods sold on the site, before product returns.

Monthly sales at Flipkart over the past two months have increased sharply from the Rs2,000 crore levels they hovered around in the months before BBD. Amazon had overtaken Flipkart in terms of gross sales (on a standalone basis) in at least two months before the BBD.

“As a policy, we do not comment on sale numbers. However, as a market leader, we continue to grow the e-commerce market in India through India-centric innovations and by continuously improving customer experience. We are focused on delighting our customers across the length and breadth of the country by bringing the best selection of quality brands and products at affordable price points," said a Flipkart spokeswoman in response to queries from Mint.

Flipkart’s performance sets it up for a much-needed fund raising, which had looked improbable last year given Amazon’s ascent and a series of markdowns by its own investors.

“With Amazon’s unrelenting focus on providing the best customer experience to the Indian customer through investment in technology, infrastructure and innovation, we saw growth of 124% in 2016 vs 2015. We continued to see this momentum in January and Amazon.in’s first Great Indian Sale in January 2017 set new benchmarks in daily units, showing a 200% growth over normal business day. One out of two orders were placed by Amazon Prime members.

“We have continued to expand our programmes such as Amazon Pantry, now available across 13 Indian cities and Amazon Now that is available in four cities of Mumbai, Delhi, Bangalore and Hyderabad," said an Amazon India spokeswoman on Thursday.

Mint reported in October that encouraged by its BBD win, the company will hit the market to raise $500 million to $1 billion.

Equally significantly, the strength in sales indicates that Flipkart is capable of holding on to market leadership and that it is gradually returning to its peak of 2014, when it set the standards in India’s e-commerce market despite the presence of Amazon.

The revival in sales at the online retailer has been driven by its new chief executive officer Kalyan Krishnamurthy, who replaced Binny Bansal last month.

Krishnamurthy had been running much of the company since he rejoined Flipkart in June 2016 from the company’s largest investor Tiger Global Management in a vaguely defined role of head—category design organization. He was the architect of the company’s BBD win over Amazon and was rewarded by the board led by Lee Fixel, his former boss at Tiger and the most influential voice at Flipkart.

The key to Flipkart’s turnaround has been its successful effort to reclaim the smartphone category, which accounts for more than half of all online retail in India. Flipkart had changed the face of retail in India in 2014 by expanding the market through the introduction of high-quality low-cost smartphone brands such as Xiaomi and Motorola. These brands which were exclusive to Flipkart then shifted loyalties to Amazon, giving the latter the platform to mount its title challenge. Since Krishnamurthy returned to the company, he made winning back smartphone brands Flipkart’s No.1 priority.

The company’s improved performance isn’t just restricted to smartphones. Over the past three months, Flipkart has seen higher sales in large appliances and fashion compared with pre-BBD levels, the first two people cited above said. In early December, Flipkart also launched a private label called SmartBuy in mobile accessories. Though the business is small, Flipkart expects it to pick up.

Apart from the Flipkart-Amazon battle, investors are anxiously watching the evolution of India’s online retail market. E-commerce executives and investors were shocked last year as online sales barely budged from the level of roughly $14 billion in 2015, dashing hopes of an $80-100 billion market by 2020. This year the market is expected to bounce back, aided by the expansion of 4G services, though all bets are off after the worrying stagnation in 2016.

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