Flipkart
Flipkart Reuters

In a bid to take on the lucrative loyalty service dominated by Amazon, India's e-commerce giant Flipkart is set to launch its loyalty service, dubbed Flipkart Plus on 15 August this year. Unlike Amazon's Prime, Flipkart Plus will be a no-fee, points-based program with third party benefits, such as Hotstar.

The service will reward regular customers, who will earn points or coins for every purchase. The more a customer shops, the more points he/she earns and these can then be used to unlock rewards and benefits tied to the platform, such as faster delivery and personalised discounts.

At launch, the service will work with third-party companies like Hotstar, Zomato, MakeMyTripand Cafe Coffee Day where Plus members can redeem their points. Flipkart hopes to add more partners over time to the program.

It was first reported that Flipkart was planning to relaunch its loyalty program in October 2017, after its first attempt Flipkart First failed. The loyalty program is a major factor for Flipkart since it has been where it has lost huge ground to Seattle-based Amazon.

Amazon's Prime service, which costs Rs. 999 a year offers subscribers faster delivery, bigger discounts and video and music as well. With Plus, Flipkart will be hoping to use its third-party network as a key attraction to entice more people to shop.

With India's e-commerce market valued at $18 billion, a majority of the value comes from well-off customers in urban areas, where Amazon Prime is a huge winner, comprising of 30 percent of all orders on Amazon India. With Plus, Flipkart will be hoping to not just reduce Amazon's dominance in the urban markets, but also increase the e-commerce presence in rural markets.