Flipkart

:

Flipkart One of the leading Indian e-commerce
companies headquartered in Bangalore, Karnataka
Founded by Sachin Bansal and Binny Bansal in 2007 with
4 lakhs funding
Raised two rounds of funding from Accel India and Tiger
global management
Early focus on online sales of books and later expansion
of product line
Offers multiple payment methods
Path Breaking Services
Among the top 20 Indian Web sites in terms of traffic
Regarded as the Amazon of India



INTRODUCTION

ACQUISITIONS
2010: WeRead, a social book discovery tool

2011: Mime360, a digital content platform company

2011: Chakpak.com is a Bollywood news site that
offers updates, news, photos and videos

2012: Letsbuy.com is India's second largest e-retailer
in electronics for an estimated US$ 25 million
Initial Challenges (1/2)
Bad Experience of Indians with online shopping in
the past
1. poor experience with the product
2. late shipping
3. poor customer service

Not an easy segment to break into, people were very
particular in paying money for something which they
had not seen and received.

Initial Challenges (2/2)
Skeptical about security of online transactions

Flipkart building Trust
COD
24*7 Customer Service
Never Promise something that you dont have it built its own inventory
Delivery its own courier company
No-Questions-Return policy and 30 days replacement policy - A recent study has
found that 89% of online buyers say return policies influence their decision to shop
with an e-tailer
Right Timing helps!
Indian railways www.irctc.co.in played a big role to
its success.

Internet boom in India and growing internet
base/users in India.

Not much competitions in the market.

Growth Story
0
100
200
300
400
500
600
2008-09 2009-10 2010-11 2011-12
Revenue ( in crore )
Growth Story
Started with books and went on to
add new products
2 employees, 2 suppliers to 4800
employees and more than 600
suppliers
Have their own internal courier
services called flipkart logistics
Flipkart 2011-12
Why Books were the first choice?
Lower transaction size

Better Shelf size

Shipping and handling of books is easy

To emerge as a pioneer in book retailing rather than
venturing comparison shopping engine
Competitors in book market
5 sites cheaper than flipkart to buy books
Uread.com
Simplybooks.in
Bookadda.com
Landmarkonthenet.com
Infibeam.com
- offering better discounts, consumers choices are
split and they seem less inclined to buy books only
from Flipkart.
No. Of hits on the websites
Sep 2011- Aug
2012
Colour Codes Average Scores with respect to Flipkart
Flipkart.com 1
Ebay.in 0.82
Myntra.com 0.5
Jabong.com 0.3
Snapdeal.com 0.42
Performance measurement
Profit gauge
- Repeated transactions

- 70% of customers come back


Reducing COD customers.

Flipkart Strengths
Price reductions

24 hour a day shopping

Complete freedom and time to choose

Satisfied customers purchase frequently and
spending will increase
Segments Shopping
Orientations
Internet
Exposure
Experience as
E Shopper
Demographics
Convenience oriented New
Shoppers
Opening hours
and time savings
Medium-low Men 25-44 Medium
High Class
Big Towns
Convenience oriented
experience shoppers
Opening hours
and time saving
High Men 25-34
High Class
Big Towns
Involved shoppers Only medium
available
High Men 14-24 Medium
High Class
Big Towns
Dual shoppers Only medium
available
Medium- low Men 14-24 Medium
High Class
Middle Towns
Price oriented shoppers Price reductions - - Men 25-34 Medium/
Medium High Class
Big Towns
Informational recreational
surfers
Low information
search costs and
easily
comparison or
try out
- - Men 25-34 Medium
High Class
Big Towns
Metros Vs Small Towns
In small towns
- consumers value personal communication highly
- they are less stressed
- have fewer traffic problems
So they are less willing to buy online
Metros
- encourages new channels such as internet
- nuclear families
- traffic problems and more stressed


123


Gifts
Occasions
Discounts , free home delivery
Price comparison
Benefits
Potential user
First time or second time user
User
Status
Behavioral Segmentation
Demographic Segmentation
Age
Kids Baby care, Toys
Teen Playstation, Xbox, movies, music
Gender
Male Computers, Mobiles and accessories, Watches
Women Beauty and Health care ,Home and Kitchen
Occupation
Student Books, Music, Movies, Stationaries
Traveler Camera, Luggage, Books
Working Mobiles, Computers, Watches

Segmentation Variables
Survey Findings
If a product is priced equal both online and at the
Retail store,63 % prefer buying from the Retail outlet
2/3 rd of them said that Electronic Goods are
cheaper to buy online than at the brick and mortar
stores
69% of the respondents said that Online shopping
shall replace the Book Stores
28% of the users said that they had to return an
online purchased item when it was delivered
17 % felt it was not convenient to shop online
20% reported more varieties online as compared to
the 80% who preferred the stores



0
10
20
30
20
22
25
8
0
26
Sales
15%
15%
12%
15%
6%
37%
No. of events of online
purchases in the last 12
months
1 2 3 4 5 >=6
62%
29%
9%
USP of Flipkart
Cash/Card on
Delivery
Easy to Order
Easy to
replace
0
100
77
4
10
2
7
Competition
Myths- Hogwash
Yes
89%
No
11%
Do you feel it is safe to
make payments online?
58%
23%
10%
9%
Which product did you buy from Flipkart
Books Mobile Phone
Computer and Accessories Apparels
Consumer oriented model




Cost
Heavy discounts on books
Free shipping for purchases above
Rs. 300








Consumer
Availability of products across 14
categories
Books can be ordered before they
are launched
Pan India presence





Communication
Advertisements via Search Engine
Optimization
Transparent Communication
Once the customer places an
order, progress can be tracked





Convenience
Ease of finding the product and
related information
Purchase at the click of a button
Cash/ Card on Delivery

Marketing
Mix
Decision making process
Evaluation of
Alternatives


Customer perceived
value


Wider range across all
categories
Purchase Decision

Faster turn around
time
Cash/Card on Delivery

Easy Return Procedure
in case DOA
Post- Purchase
behavior
Feedback on Flipkart
website and other
blogs
Word of Mouth
Affiliate
Dot -Com
Generation
Target group
PURCHASE
Time Poor
Customers
Cost
Effective
Non Tier 1
Cities
looking for
wider range
PORTERS ANALYSIS
RIVALRY

High Level of Promotion
NEW
ENTRANTS
Low Entry and Exit Barriers
Accessibility
SUBSTITUTE

Price Wars
CUSTOMERS
Low Switching Cost

SUPPLIERS
Loyalty
New products

PORTERS
FIVE
FORCES
I
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E
R
N
A
L

F
A
C
T
O
R
S

E
X
T
E
R
N
A
L

F
A
C
T
O
R
S

STRENGTHS


BRAND
SUPPLY CHAIN MANAGEMENT
QUICK TURNAROUND TIME
ADVERTISEMENT AND PROMOTION
STRATEGIC ACQUISITIONS
HUGE REACH
WEAKNESSES


DELIVERY
INTERNET PENETRATION
PAYMENT GATEWAYS
HIGHER COSTS


GROWTH IN e-TAIL
GROWTH IN e-BOOK CULTURE
BROADBAND PENETRATION
MOBILE APPS



OPPORTUNITIES
NEW PLAYERS SUCH AS AMAZON





THREATS




S W







HARMFUL
To achieving the objectives
HELPFUL
To achieving the objectives
O
T
New Strategy



None of the people who took the survey said they buy music online

Songs are priced very high , Rs 6 - 15 per song

5000 downloads a day




Flipkart in NEWS

$150m in latest funding round by Nasper
Iconiq Capital - another new investor
Tiger Global and Accel Partners make follow-on
investments
MIH India pumping a little over $90 million

Suggestions
Monthly foreign magazine e.g. Man U magazine
Loyalty program, combo offers
Music instruments
Outdoor kits, posters, sporting event DVDs
Greeting Cards
Sponsor an Inter School Literary Competition to
encourage students to read
Along with book ordered, send some more books (
popular and related ) with the courier guy to show to
customers
Flyte, digital music sales channel of Flipkart can have
a relook at the prices

References
www.flipkart.com
http://thenextweb.com/in/2012/08/13/digital-music-takes-indias-flipkart-
flyte-soars-past-600000-downloads-6-months/
http://timesofindia.indiatimes.com/tech/news/internet/Flipkart-raises-
150m-in-latest-funding-round/articleshow/15674360.cms
http://www.quora.com/Is-Flipkart-making-a-profit
http://www.quora.com/What-will-happen-to-Flipkart-when-Amazon-
launches-its-operations-in-India
http://blog.flipkart.com/2-new-features-cash-on-delivery-online
http://trak.in/tags/business/2012/06/01/jabong-trumps-flipkart-offers-
door-step-card-payment-cod/
http://www.hindustantimes.com/technology/IndustryTrends/How-
Flipkart-broke-India-s-online-shopping-inertia/Article1-780440.aspx
http://businesstoday.intoday.in/story/flipkart-online-shopping-e-
commerce-order-books-online/1/20797.html