Flipkart and Amazon's fortunes depend on smartphone sales

The success of leading e-commerce companies Flipkart and Amazon this year depends on the number of smartphones they sell amidst sharp discounts. The segment contributed around one-fourth of the e-commerce sector's merchandise value last year and is expected to do the same this year as well.

In 2016, Flipkart led the online smartphone sale market, says data from Counterpoint Research. The data also suggests that in the present year, it has already taken a substantial lead over Amazon in the first quarter.

Also read: People are no more interested in buying smartphones online, thanks to fewer discounts

Other than each other, the companies also have competition from handset makers that have launched their own phone selling portals, like Xiaomi's mi.com.

This competition has resulted in both Amazon and Flipkart announcing sale periods in the middle of the year, with no festive season around.

Also read: It’s the season of sales, but Flipkart and Amazon are not alone

"The success of the online players depends to a large extent on the success of smartphones in 2017," Pavel Naiya, senior analyst at Hong Kong-based Counterpoint Research, told ET. "This is an attempt for Amazon and Flipkart to deal with the seasonal slow movement in the online market, and right now, smartphone is one of the key segments for online sales."