Transcript
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
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