As Flipkart slips, Amazon is tightening its grip on India’s mobile shoppers

Flipkart is losing its grip on India’s mobile shoppers.

On the face of it, the homegrown e-commerce company is leading the pack. As of March, Flipkart accounted for 30.7% of India’s monthly mobile e-commerce users, according to data intelligence firm 7Park Data. Amazon was almost neck-to-neck with Flipkart, capturing 30.3%. Snapdeal lagged far behind at 10.8%.

However, a closer look at the shifting user base and commitment level among customers reveals that Amazon is gaining at the expense of Flipkart. Bengaluru-based Flipkart, founded in 2007, got a six-year head start on Amazon, which arrived here only in 2013. Yet, it is getting beat.

Even though Flipkart captures a marginally larger share of the mobile app market, its overall performance has dipped. From Q1 2016 to Q1 2017, its app engagement declined 11.5%. During this period, Amazon saw a huge 46% rise. Mobile is a key component of India’s e-commerce market. In 2016, for instance, more than 80% of traffic to both Flipkart and Snapdeal came via their respective apps or mobile sites.

Flipkart’s users also don’t seem as keen on staying on and browsing. The minutes per active user declined 42.6% for the e-tailer in the first quarter of 2017 compared to a year earlier. Time spent by customers on Amazon ticked up 14.9% in this period.

In all, users are spending 7.6 more minutes on Amazon than on Flipkart, according to 7Park data.

In December 2016, Amazon seized the top spot in app penetration – the share of surveyed users who had the app installed – from Flipkart. As of March this year, 40.8% of the surveyed shoppers had installed the Seattle-based company’s mobile app while 38.4% had Flipkart’s.

Both companies attract similar numbers of unique visits, but Amazon had 10 times more browsers turning into buyers then Flipkart did. From Q1 2016 to Q1 2017, Amazon’s unique purchasers grew 113.1%, well above Flipkart’s 10.8% uptick.

Amazon’s upper hand can be attributed to two factors: its breadth of offerings and an ability to adapt its successful model from other countries for India. The Jeff Bezos-led company has committed to spend more than $5 billion in India over the next few years. That trumps Flipkart’s $3.2 billion and Snapdeal’s $1.7 billion put together.

Amazon’s global business is a well-oiled machine with deep pockets, so it can afford to burn cash in India. And as India’s e-commerce industry undergoes consolidation and overcomes a funding crunch, domestic firms are left with two options: bulk up cash reserves or join forces.

These changes are already taking place, Brian Chaitoff, research director of 7Park Data, says. After all, Flipkart just raised $1.4 billion and rumors of a Flipkart-Snapdeal merger are rife.

This article first appeared on Quartz.