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The Research provides information about an overall analysis of a leading ecommerce platform in India and thereby examines their strategies with respect to E-business and marketing. The growth of this portal has been precedential in defining the E-business parameters in India.
Study of “Flipkart.com”: India’s Leading E-business Portal
12 Summer Study of “Flipkart.com”: India’s Leading E-‐business Portal “ Flipkart- Amazon of India ” LSE ID Number: 201134149 Name: Agrawal Sagar Course: MG.150 E-‐Business in the Digital Age
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 2 Executive SummaryThe Research provides information about an overall analysis of a leading ecommerceplatform in India and thereby examines their strategies with respect to E-business andmarketing. The growth of this portal has been precedential in defining the E-businessparameters in India. Page 2
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 3 INDEX S.No Topic Page No. 1. Introduction 04 2. E-commerce in India 05 3. Company Profile 06 4. Company Growth & Expansion 07 5. Study of Consumer Behavior 09 6. Flipkart Success Factors 10 7. Challenging the Challenges 11 8. Marketing strategies 12 9. Expansions & Future Opportunities 13 10. Conclusion 15 11. References 16 Page 3
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 4 www.Flipkart.com Page 4
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 5 IntroductionThe Organization, which I have selected for my Study, is “Flipkart.com” anEmerging Indian online mega store. I would be studying the strategies that the portalhave used to attract Indian masses, so as to give them the total online shoppingexperience, the portal offers an unique strategy to masses to make payment modeslike Cash & Card on delivery, which invariably helps the masses to avoid the hassleof making online payments, as the credit card penetration in India is very low, &people are reluctant to make online payments more to do with the Indians psyche.Since portals are giving a customized offering to the masses i.e rite from the widerproduct portfolio to payment options, its making very convenient for the users to havea online shopping experience hassle free.Flipkart has followed the same business model as of Amazon.com, i.e starting fromselling books therefore we can call it as “ Flipkart - The Amazon of India “, howeverFlipkart is now Regional based E-business portal i.e only targeting Indian Market.More Intresting is that, the minds that worked to start Flipkart are also the Ex.Amazon Empolyees. Page 5
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 6 E-Commerce in IndiaIndia is one of the fastest growing & emerging economies of the world, having a veryhuge consumer base & a big mass connected to Internet (approx. 100 million). The E-business trend have been catching up in the country with the increasing rates of local& domestic firms using the E-business model to do business which is very differentfrom the traditional way of doing business in India, it has lead to a interesting trend inthe market for the online shopping starting right from ordering food, grocery,vegetables, fruits, taxis, electronics & so on. Page 6
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 7 COMPANY PROFILEFlipkart.com is an Indian based e-commerce company started by Binny Bansal andSachin Bansal, who previously worked at Amazon.com. Post their experience, theyventured into a similar e-business idea and launched it in India. Flipkart.com workswith the aim of making products and goods easily available at the doorsteps of anyonewho has Internet access. Flipkart.com started off from selling books in 2007, based inBangalore, and entered then consumer electronics category with the launch of mobilephones, in September 2010. Since then it kept on adding more new productscategories including books, mobiles, computers, cameras, home & electronic gadgets& appliances, In addition to these very Recently, Flipkart.com has also widened itsforay by entering into the emerging digital content market with the recent launch ofFlyte, the digital music store & is still continuing to enlarge its product portfolio.It is now one of the leading e-commerce players in India, currently ranks at the top 20websites in India1, spread in 37 cities, with 11.5 million plus book titles, 14 differentcategories, 3 million plus registered users and sale of 30000 items a day.It provides online-shoppers a memorable online-shopping experience because of itsinnovative services like: • Cash on Delivery, • 30-day replacement policy, • Easy Monthly Installment options (EMI), • Free shipping • Discounted prices & deals 1 *source: http://www.alexa.com/siteinfo/flipkart.com Page 7
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 8 Company Growth and ExpansionThe company was initially self- funded, by both co-founders Sachin and Binny Bansalspending Rs 400,000 or USD 9056 to setup the business. They later raised funds fromPrivate Equity Investors i.e Accel Partners and Tiger Global Management of $31million.In the year 2010, the company acquired WeRead, a social book discovery tool; in2011, Mime360, a digital content platform company and Chakpak.com, a Bollwoodnews site; and its most recent acquisition is Letsbuy.com which is India’s secondlargest e-retailer in electronics.Flipkarts reported sales for the last FY i.e were 75 crores 2010-2011, which hasincreased 4 folds from that of the previous year were sales accounted for 20 crores inFY 2008-2009, 20 Cr. And In FY 2011-2012, Flipkart.com now the portal is expectedto cross 500 crores mark as Internet usage in the country exponentially increases. Page 8
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 9 Interesting facts & figures about the portal: • Flipkart employs 4500+ people • 2 million sales unit and 4 million visitors/month • 11.5 million titles, Flipkart is India’s the largest online book retailer. • Registered user base of 4 million customers • Ships out as many as 45,000 items a day, clocking daily sales of approx Rs 2.5 cr. • Flipkart is now investing in expanding its network of distribution centers, warehouses, procurement operations which is now in only 8 cities in country, so as to reach more & more Indian cities. • The company is even setting up its own delivery network which is now in 37 cities, by which company can save up cost associated to the outsourced shipping & logistic function and is set to expand this even further by next year. Page 9
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 10 Study of the Consumer behaviorIn India there is hesitancy in using an online portal for purchase of goods because ofvarious reasons. The most prominent of which is that an online payment gateway isnot user friendly. However, Flipkart.com’s most outstanding feature is its COD orCash On Delivery pricing strategy, which gives the user the experience of onlineshopping and the security of physical shopping. Also, Flipkart.com has a 30-dayreplacement guarantee and an original product warranty, which dispels all doubtsfrom an online shopper’s mind. Page 10
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 11 Flipkart Success FactorsThe site is very easy to navigate, which helps users to easily search for the contents orproducts online, it even allows users to search by using various filters like by pricerange, search by brands, by age group, by hot-selling etc. If a certain product is notavailable or is out of stock it even ask users to input its details & then when theproducts is available the desired users are informed, this really helps one connected tothe products they are seeking & leads to repeat & frequent purchases.The Flipkart site is fast & powerful, i.e if you Search any products in the flipkartsearch bar and you’ll find exactly what you looking in likes no time & it’s very quickto process the payments & transactions by a every efficient & flexible paymentmechanisms of the portals. Approximately 60% of orders are placed in cash ondelivery system. So there is high possibility scams & frauds, so users have to havetheir email account linked & with verified details & receives a confirmation codemessage on their cell phones or email, after which the users confirms the unique code& the transaction is processed & usually get delivered in 2-3 business days on theconfirmed mailing address.Flipkart manages to deliver the item in 2-3 business days. If the order placed is notdelivered in the specified time, immediate enquiry goes to nearest supplier and theitem becomes available. It will then be delivered within 24 hour depending on thecause of delay**.Flipkart is continuously aiming to bring down the delivery time of regular orders, indoing so its investing in its own delivery system & network, As the time to delivery isone of the important aspects of selling products online as users want a fast turn aroundtme, its An excellent marketing strategy by flipkart marketing team to increase thesales revenues & to optimize the user shopping experience & increasing loyalty byrepeat purchases.The portals offers a good pricing offers & deals to its users by the means of cashrewards, loyalty points, discounts, coupons, Frequent buyer rewards points. it evenoffers goods relatively cheaper pricing points than it is available in the physicalmarket which in total helps users save money & at the same time get benefited by themeans of rewards points. Page 11
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 12 Challenging the ChallengesOne of the biggest hurdles is the Lack of infrastructure to support new businesses;therefore managing logistics & supply chain is a big cost & concern affecting all theE-portals Logistics companies.Another big obstacle is that Users having lack of trust over making Payment onlineusing the payments gateways makes its more difficult for the E-businesses to attractmore customers & increase sales units & revenues. Additionally, Indians have andistaste to credit cards – only an estimated 2 percent of the nation has a credit cardand a number of new payment gateway companies such as Paypal & CC Avenue havesprung up to service the growing e-commerce ecosystem. Bt importantly Indians arebanking on Alternative payment methods such as Netbanking and all the major E-business portals are now offered cash on delivery.***Source : Read more: http://articles.businessinsider.com/2011-03-30/tech/29987630_1_e-commerce-market-web-users-internet#ixzz22QUb4vlW Page 12
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 13 Marketing Strategies‘Flipkart’ initially followed “word of mouth marketing” to popularize theircompany. A few months later, the first book company sold on flipkart.com - JohnWoods “Leaving Microsoft to Change the World”. Subsequent to its success onits book category, flipkart aggressively marketed themselves on all over the net &specially banked in the social networks like facebook, twitter so as to get connected tothe users & to all the aspiring customers, Over the years Flipkart has managed tobuild a strong community having millons of followers on its twitter & facebook pagesgiving instant responses and interaction.Flipkart has also managed to sync all its operations via the mobile apps on all themajor platforms like android, apple, blackberry & a mobile website facilitating theonline purchases & selling functions.From such mobile apps & strong communities online, its is managing leverage itmarketing & sales offers, promotions & customer database in providing them thecustomized outlook & offerings & at the same time keeping them updated about thenew products addition, promotions & pricing & latest offerings.However, Flipkart has gone aggressive on the offline media as well i.e Television &,Print. It has come up with series ad campaigns on both TV and Print, by which it hashelped in making its band presence huge & now it it now got a good brand Recall. Page 13
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 14 Expansion & Future Opportunities • Should look for International/ Oversea’s markets or Neighboring Countries • Strategic alliance with International brands & suppliers i.e sourcing & routing the international products in the domestic market & vice versa, this can help them get cost advantage & benefits. • Critical mass of Internet users – Internet users in India is increasing at increasing rate, so flipkart can target more & more cities i.e not only tier 1 & 2 but also tier 3 & 4 cities, which will help generate stronger customer base & more revenues. • Should clearing focus on the Growing Online Apparel business & it can diversify into apparel category either organically or by acquiring other portals. • Rising middle class with disposable income: with are rising disposable income company should focus on tapping this middle class, which apparently constitutes up to 40% of Indian population. • User Experience: Portal should continuously aim to work to improve the user experience by adding more & more innovative features in the website like virtually shopping basket, virtual trial rooms, avatars. In this competitive world to differentiate via user experience, the ultimate winner will be the Indian online consumer. • Should heavenly invest into E-CRM & online reputation management • Logistics & Supply Chain: should continuously aim to reduce the delivery time cycle. **source : Read more: http://articles.businessinsider.com/2011-03- 30/tech/29987630_1_e-commerce-market-web-users-internet#ixzz22QUb4vlW Page 14
Study of “Flipkart.com”: India’s Leading E-‐Business Portal 15 ConclusionThe Overall Brand Value of Flipkart is Good, but it is facing some tough competitionfrom its global competitors like Ebay and Amazon. But if talking about domesticmarket i.e India, it is the most superior E-business portal which is aggressivelyexpanding & planting its roots deep into the Indian market & at the same time shiftingthe mindset of the people i.e from going & shopping from physical store to onlinestores, which is magnificent! Page 15