Flipkart.com

Group 9 :•Ritesh Kamal (B032)•B Kushal Kumar (B036)•Richansh Kumar (B038)•Sushant Kumar (B039)•Ganesh Padhi (B047)•Mayank Shukla (B055)

• 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 product2. 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 don’t 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

2008-09 2009-10 2010-11 2011-120

100

200

300

400

500

600

Revenue ( in crore )

Growth Story…Started with books and went on toadd 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.

Understanding the competition

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

Analysts and venture capitalists say Flipkart making considerable losses on book transactions

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 ClassBig Towns

Convenience – oriented experience shoppers

Opening hours and time saving

High Men 25-34 High ClassBig Towns

Involved shoppers Only medium available

High Men 14-24 Medium –High ClassBig Towns

Dual shoppers Only medium available

Medium- low Men 14-24 Medium –High ClassMiddle Towns

Price oriented shoppers Price reductions - - Men 25-34 Medium/ Medium –High ClassBig Towns

Informational recreational surfers

Low information search costs and easily comparison or try out

- - Men 25-34 Medium –High ClassBig 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

•GiftsOccasions•Disco

unts , free home delivery

•Price comparison

Benefits

•Potential user

•First time or second time user

User Status

Behavioral Segmentation

Demographic Segmentation Age Kids – Baby care, ToysTeen – Playstation, Xbox, movies, music GenderMale – Computers, Mobiles and accessories, WatchesWomen – Beauty and Health care ,Home and KitchenOccupation Student – Books, Music, Movies, Stationaries Traveler – Camera, Luggage, BooksWorking – Mobiles, Computers, Watches

Segmentation Variables

PRIMARY ANALYSIS

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

Initial_Report.pdf

<200 200-500

501-1000

1001-1500

1501-2000

> 2000

05

1015202530

20 2225

8

0

26

Sales

15%

15%

12%16%6%

37%

No. of events of online purchases in the last 12

months

1 2 34 5 >=6

62%

29%

9%

USP of Flipkart

Cash/Card on Delivery

Easy to Order

Easy to replace Flipka

rt

Amazon

Snap

Deal

Myn

traEbay

0

40

8077

4 102 7

Competition

Myths- Hogwash

Yes89%

No11%

Do you feel it is safe to make payments on-

line?

59%23%

10%

9%

Which product did you buy from Flipkart

Books Mobile Phone Computer and AccessoriesApparels

Consumer oriented model

CostHeavy discounts

on booksFree shipping for purchases above

Rs. 300

ConsumerAvailability of products across 14

categoriesBooks can be ordered before they

are launchedPan India presence

CommunicationAdvertisements via Search Engine

OptimizationTransparent CommunicationOnce the customer places an order, progress can be tracked

Convenience

Ease of finding the product and

related information

Purchase at the click of a buttonCash/ 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 MouthAffiliate

Dot -Com Generation

Target group

PURCHASE

Time Poor Customers

Cost Effective

Non Tier 1 Cities looking for wider

range

Understanding the category

India is one of the fastest growing digital markets in the world

ASSOCHAM says the online retail market in India may grow to Rs 70

billion by 2015 from Rs 27.5 billion, today as internet access

improves

Online retail accounts for less than 1% of the total online

market in India thus provide a huge growth potential of the market for both domestic and

international players

Reasons for Online

Shopping

Busy Life Style

Unavailability of a particular brand in a

particular region

Cash/Card on Delivery

Discounts and Offers

PORTER’S 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

PORTER’S

FIVE FORCES

INTE

RNA

L FA

CTO

RSIN

TERN

AL

FACT

ORS

EXTE

RNAL

FAC

TORS

EXTE

RNAL

FAC

TORS

STRENGTHS

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

STRENGTHS

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

WEAKNESSES

•DELIVERY•INTERNET PENETRATION•PAYMENT GATEWAYS•HIGHER COSTS

WEAKNESSES

•DELIVERY•INTERNET PENETRATION•PAYMENT GATEWAYS•HIGHER COSTS

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

OPPORTUNITIES

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

OPPORTUNITIES

• NEW PLAYERS SUCH AS AMAZON

THREATS

• NEW PLAYERS SUCH AS AMAZON

THREATS

SWHARMFUL

To achieving the objectivesHARMFUL

To achieving the objectivesHELPFUL

To achieving the objectivesHELPFUL

To achieving the objectives

OT

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

Primary

Research

Secondary

Research

Suggestions

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-mu

sic-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-Flipk

art-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