Flipkart targets Amazon Prime-like customers with VIP membership launch

Flipkart is intensifying its rivalry with Amazon in the Indian e-commerce market by launching its own version of Amazon Prime, called Flipkart VIP. This move comes just ahead of the festive season sale when both companies aim to entice customers with substantial discounts.

Flipkart VIP is available at an introductory price of Rs 499 per year, mirroring Amazon's initial pricing for Prime. Notably, this is one-third of Amazon Prime's current annual fee. Although prices may change over time, both services offer similar benefits such as early access to sales and significant discounts.

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While Flipkart VIP promises free same-day/next-day deliveries in selected areas, it falls short of Amazon Prime's nationwide offering. Flipkart does not currently extend this delivery service to all customers, which has given Amazon an advantage through Prime.

Flipkart VIP also expedites the returns process, with pickups within 48 hours, and provides dedicated customer support for its members—a service currently lacking with Amazon Prime.

However, Amazon Prime includes a range of entertainment services like Prime Video, Music, Gaming, and Reading, whereas Flipkart VIP doesn't offer entertainment options but does enable flight rescheduling at nominal rates through Cleartrip.

Flipkart's discount

The Walmart group has partnered with ICICI Bank, Axis Bank and Kotak Mahindra Bank to offer discounts on purchases.

It will also provide a credit facility of up to Rs 1 lakh through Flipkart Pay Later to customers.

"Personal loans of up to Rs 5 lakh at an interest rate of 12.5 per cent per annum can be availed by customers from the Banking partners on the platform," Flipkart said.

According to a market research firm Redseer Strategy Consultants, Flipkart led the first phase of festive season sales in 2022 with a 62 per cent share in terms of gross merchandise value followed by Amazon with a GMV of around 26 per cent share.

E-commerce companies were estimated to have generated a total sale of around Rs 40,000 crore during the first phase of the festive season sales.

A recent report by the market research firm projects online sales during the upcoming festive season to grow by 18-20 per cent and touch Rs 90,000 crore this year.