Flipkart – India’s Amazon – Launches Paid Subscription Service with Free Giveaway

While it’s easy to think Amazon and Apple own the world, both companies actually have fair competition outside the US. In India, for example,

While it’s easy to think Amazon and Apple own the world, both companies actually have fair competition outside the US.In India, for example, Flipkart is becoming the dominant retail portal. (Founders Sachin and Binny Bansal worked for Amazon before starting Flipkart in 2007.) And this week, the company announced it’s launching a paid subscription plan, much like Amazon Prime, where subscribers can get free shipping for all orders, free ‘In-a-Day Guarantee Delivery’, same day guarantee delivery at a discounted price, a 60-day replacement policy, priority service from customer support and other benefits.There’s no word on pricing just yet, and the company is running a lottery for free 3-month subscriptions to the service. (We saw a similar strategy employed by Slide Bureau and Enigma; it can work well for acquiring new subscribers on a new service, but only if you have a back-end sophisticated enough to handle the influx of new leads and convert them effectively upon renewal.)

Flipkart is currently generating nearly $3 billion a year in retail sales, but Flipkart VP (Marketing) Ravi Vora said that only about 20% – 30% of India’s 16 million – 20 million online shoppers are regular online customers. A subscription service is a nice way to make this new consumer behavior (for India) a regular practice.However, the site does face challenges in establishing recurring revenues. One of the main selling points for Indian consumers has been Flipkart’s willingness to take cash on delivery, a popular payment method in India. Credit and debit card payments are not as common in India as they are in America, although Flipkart is already set up to take such payments (the site also accepts Direct Debit, e-gift vouchers — or gift cards — and card swipes on delivery).At the same time, Flipkart could see phenomenal growth in subscriptions by offering streaming video on-demand like Amazon Prime. In 2011, Flipkart acquired Chakpak.com, a Bollywood news site that offers updates, news, photos and videos. With the world’s largest film industry in India, Flipkart would be foolish not to try to leverage streaming video on-demand revenues in the future, as India consumers begin to adopt digital viewing preferences like American audiences. (However, adoption may take longer given the wider digital gap in India between those with Internet access and those without.)