Update: More recent graph
These two Indian startups have a lot in common except for that Flipkart is VC-funded to the tune of anywhere between $10-15 million while Infibeam is backed by the founder's money. Both were established in 2007 as online book retailers and have been scaling up at a consistently fast pace to become the top e-commerce sites in India today. According to this interesting graph on Google Trends which depicts the traffic statistics of the two Internet companies, both companies are fighting neck to neck on the traffic front.
The graph shows the daily unique visitors to both the websites across a period of around 2.5 years. According to the graph, Flipkart experienced a leap in traffic in the beginning of 2009 but fell in June to meet Infibeam's slow and steadily rising traffic. The traffic growth lines of the two companies entwines between June 2009 and March 2010 and separates as Flipkart's line falls into a trough, although it recovers around mid-June 2010. Not to be left behind, Infibeam has also been experiencing higher traffic, and by April, both the sites were almost at the same level.
Remember, we are only talking about Internet traffic. After the recent flurry of TV ads by Flipkart, the company may have managed to increase its brand awareness among general masses and that may be yet to translate into Internet traffic.
Please note this important caveat. Google Trends only provides insights into broad search patterns and there are several approximations. Google clearly states that all the traffic statistics shown are only estimates.
Infibeam began as an online book retailer but is now morphing into a supply chain management company. Over the years, the company added consumer electronics and handset retailing as well as used cars and bike classifieds. It also launched an ebook reader Pi and recently launched its infrastructure platform for retailers to set up their own online storefront.
Infibeam has not raised funding so far and is now planning to raise growth capital in the range of Rs 50-100 crore.
The Accel Partners and Tiger Global backed Flipkart also diversified from books into selling movie and music DVDs, games and consoles and mobile handsets. In December, the company acquired social book discovery tool WeRead from Lulu, a US-based on-demand publishing firm.
Flipkart is based in Bangalore. Watch our video of the startup on Techcircle.in where Sachin Bansal and Binny Bansal, the founders, take you through the making of the Flipkart story and the expansion plans ahead.
No Ads Needed
Mahesh Murthy, Partner, Seedfund and founder of Pinstorm, said in a tweet that Infibeam has achieved this without spending on ads. In comparison, this April, Flipkart launched ad campaigns to draw new users into its fold and create visibility for the Flipkart brand. Now the company is planning a couple more ad campaigns for the year. Murthy notes,"The big-budget TV, Print and online ad campaign for Flipkart seems to have made no appreciable difference to overall traffic according to data that is publicly visible. External data suggests that the traffic appears to be flat-lining since the campaign started."
Murthy adds, "Flipkart did attempt what appears to be black-hat (or disallowed) SEO 2 years ago, in 2009 - but then seems to have been disqualified by the engines back then, lost SEO juice and traffic and has had to spend 2 years and a lot of money to build itself back to where it once was."
However, word of mouth may work better for online startups. Murthy notes that top online brands such as Amazon, Ebay, Google, YouTube, Facebook and Twitter have never advertised in any significant way during their startup periods. "The rule with brands in the 21st century seems to be - the more you need to spend on advertising the less you're likely to succeed," he concludes.
When contacted, Flipkart said that as a policy, the company does not want to comment on competition / comparison stories and does not want to participate in the same.
Vishal Mehta, CEO, Infibeam.com, said, "Customers have known Infibeam by interacting with us and the resulting word-of-mouth is very powerful in building a brand. Our internal bias has always been to spend on things like best product prices, free shipping, new features and process (vs. advertising about our services). Word-of-mouth is extremely viral and customers notice us."
Infibeam may be leveraging word of mouth and/or good SEO, Murthy says.
Now the battle lines are drawn in the cyberspace. Finally, the company which wins the heart of customers will begin a new chapter in e-commerce.