Research on Flipkart.com Marketing Strategy

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Information about Research on Flipkart.com Marketing Strategy

Published on June 24, 2016

Author: KalpiSavalia

Source: slideshare.net

1. 23-Oct-2015 Flipkart.com Journey till Now Divya Mehta- divyasmehta@gmail.com Kalpi Savalia- savaliakalpi@gmail.com E-Commerce and Internet Marketing

2. AES Institute Of Computer Studies 1 Contents Acknowledgement……………………………………………………………………………………. 2 Introduction................................................................................................................................... 2 Genesis........................................................................................................................................... 3 Launching Flipkart ........................................................................................................................ 3 Previous and Current Challenges faced by Flipkart................................................................ 5 Opportunities over the years ...................................................................................................... 5 Unique Features included ........................................................................................................... 6 Business Model of Flip kart ........................................................................................................... 7 Funding .......................................................................................................................................... 8 Big Billion Day ................................................................................................................................ 8 Competitors................................................................................................................................. 10 Acquisitions.................................................................................................................................. 10 Launching Mobile App.............................................................................................................. 10 Foresight of Flipkart..................................................................................................................... 10 Campaigns …………………………………………………………………………………………… 11 Awards and Recognitions ......................................................................................................... 12 SWOT Analysis.............................................................................................................................. 13 Interesting Facts.......................................................................................................................... 14 Conclusion................................................................................................................................... 15 References .................................................................................................................................. 16

3. AES Institute Of Computer Studies 2 Acknowledgement We have tried to study deeply on the journey of an ecommerce website i.e. Flipkart.com, under the guidance of Dr. Sandeep Vasant. We are thankful to him, for giving us this project and guiding us at every step. It was really fun studying the subject and working on this project. Lastly, but not the least, we are also thankful to Prof. BIPIN MEHTA, director of School of Computer Studies for allowing this subject as an elective.

4. AES Institute Of Computer Studies 3 Introduction: “Once we believe in ourselves we can risk curiosity, Wonder, spontaneous delight, Or any experience that reveals the human spirit.” – e. e. Cummings Yes the above quote definitely suits Bansal duo, it was their belief and risk that made wonders and spontaneous delight. Sachin admitted in an interview that starting Flip kart is the most ridiculous thing he has ever done and everyone around him thought that he was out of his mind [4]. Genesis: Flipkart is the leading e-commerce company in India, which was established by 26 years old Sachin Bansal and twenty five years old Binny Bansal in 2007. Although they both are from Chandigarh, both are computer science graduates from same institute, i.e. IIT-Delhi from the 2005 batch, and also both of them share the same last names, but they are not related and just a coincidence[2]. Initially Sachin Bansal worked at Techspan for six months and then for almost 18 months he worked at Amazon India. Binny Bansal worked at Sarnoff India for almost 18 months and then he also joined Amazon India, which was again a coincidence. They both quite their jobs to begin their startup journey. They believed that they can make a difference in the Ecommerce sector of India and they wanted to create something which they can be proud of and has a long lasting value. They had a vision that there is a huge scope of Ecommerce in India. Thus Flipkart came into existence. Why only word “Flipkart”? Founders looked for an attractive, catchy and a neutral name, which did not just speak of books alone, but also could suit with any other category of products that they may add in future. [5] Flipkart can mean “Flipping things into your C/Kart” Launching Flipkart: Flipkart was originally founded on 5th September 2007as [6] Flipkart Online Services Pvt. Ltd, but the website was launched on 15th October 2007[1]. That was the time when Indian e-commerce industry was taking its beginners steps [3]. Initially founders have spent 4 Lakh rupees to the business [7]. Founders were aware with the fact that their idea itself was not new, but their business opportunity was to do better than their competitors, in terms of services. Thus their main mission was on to focus on customer services [4].

5. AES Institute Of Computer Studies 4 The journey behind establishing such big company was not easy. The journey started with a team of two and then a small team which used to manage back-end operations, and today, Flipkart has more than 33, 000 employees. Initially Flipkart was started as an online store for selling books. Founders started Flipkart because, they themselves felt the need for a good online book store [1].And today Flipkart is the county’s large online book store. Flipkart sells a book per minute [7]. In the initial months, there were families and friends of founders who were Flipkart’s customers. The two Bansals had approach blogs and social media networks such as Twitter and Facebook to find new customers as they were working with a tight budget [8]. The first real order came nearly four months after the launch of website. First customer of Flipkart was VVK Chandra [4], who ordered the book, 'Leaving Microsoft to Change the World'. After six months, the first thing that the founders did, was taking an office on rent and hiring a helper. At the end of their first year, the business had grown enough for the founders to hire a team of six. Bansals wanted to sell their products at lower rates and also they wanted to make sure that each of their customer receives his/her order at his/her doorstep. They relied on discounts, free shipping and personalized services to build their business. [7] This is how the journey of Flipkart began with zero customers and today it is the leading e-commerce marketplace in India which has over 20 million products across 70+ categories. Below figure explains it all.

6. AES Institute Of Computer Studies 5 Previous and Current Challenges faced by Flipkart: 1. Finding Vendors: Major challenge that founders faced initially was, to get tie-ups with the book vendors. Founders used to go across the roads of Bangalore to get the orders from big or small distributors [4].Sachin Bansal has shared one of their marketing strategies, in one of the interview for yourstory magazine: “We used to stand outside Gangaram Book Stores on Church Street and hand over Flipkart bookmarks to the people coming out of the shop. In order to make sure that our targeting was right, we would give bookmarks to only those who were coming out with books in hands; the people who have made purchases.” Over the years, Flipkart’s marketing has evolved to more sophisticated approaches. 2. Payment gateway: The second major challenge that Flipkart faced was to get the approval of online payment gateway for credit cards. Flipkart did not wanted to use CCAvenue, as their user interface was confusing, so founders had to convince Axis bank, which was not easy, as Flipkart was self-funded startup and also they didn’t have any offline presence. 3. Customer Acquisition: To get people to come on an e-Commerce site and make a purchase involves heavy cost, due to advertisement and marketing [9]. In India, this cost is significant. 4. Trust: Trust among people for online purchasing was also a major challenge for Flipkart in its initial years. In India people do not buy online simply because they don’t trust online purchasing. Building that trust among people at that time when e-Commerce was so new in India was a big challenge. Even today, 5. Discomfort of Plastic money: In India, even today, very less amount of population, uses credit/debit cards for their transactions. There might be many reason, but they prefer cash, more comparative to the plastic money. Opportunities over the years: Sachin and Binny has seen a lot of opportunities in Flipkart’s seven years of existence. They see challenges as opportunities and believes that if we can solve challenges then it automatically becomes opportunity for everyone. Sachin says that we are in such an era were internet is like oxygen for youngsters, India has immense opportunities in next

7. AES Institute Of Computer Studies 6 five years to achieve massive growth, there may be hurdles in way to reach destination but there is possibility to overcome it [8]. Unique Features included: 1) Flipkart Ping: Recently, on 25th August 2015, Flipkart added a new social feature ‘PING’ to its app, to blend social messaging with online shopping. This messaging feature is the latest of new things that Flipkart has injected into its mobile app [19]. Flipkart’s chief product officer PunitSoni, expressed that- “Online shopping, has largely remained a solo experience for an individual. Ping aims to transform online shopping by allowing users to talk to each other in real-time, in order to make decisions and decide on what to buy,” With this new feature, people can message their friends using text, photos, and emoticons. Users can simply drag and drop products from Flipkart directly into a conversation. Shoppers can then share those screens with their friends to browse together and make a purchase decision. 2) Image Search: On 3rd July 2015, Flipkart added one more amazing feature i.e. image search to its mobile app. Singaporean startup Visenze is behind it. This unique feature allows users to upload an image of a product they are looking for, and algorithm shows the relevant results [18]. 3) Launching Pickup Stores: Many times it happens that, customer is not available when delivery boy knocks the door for delivery, thus Flipkart has come up with “pickup stores”. So now Customer’s delivery will now be waiting for him! A Pickup store is a value added service for Flipkart’s customers where they can walk in and collect their delivery at their own convenience. Pickup store facility is currently available at selected pin-codes in the following cities: (launching soon in more cities) Ahmedabad, Bangalore, Delhi, Gurgaon, Kolkata, Mumbai, Mysore, Pune, Silvassa, Surat, Vadodara, Vellore, Vapi. 4) Flipkart Stories: A new Blog like Feature added in Flipkart, so that customers can share their experience stories with the Flipkart community.

8. AES Institute Of Computer Studies 7 Business Model of Flip kart: Flipkart started its journey with Inventory-Led Model. In Inventory-Led Model there is huge investment in warehouse and logistics. Flipkart used this Model initially for books and gradually also started adding more categories. Flipkart then shifted to Marketplace Model, this model is about hosting many retailers on single online platform. Hence, many retailers will be able to sell their products and on other hand many customers will be able to get variety of products and brands on single platform [12]. But Flipkart has still not left the use of Inventory-Led Model and the site has told several companies and brands, which sell on the site through WS Retail, to sell directly to consumers through its marketplace in the coming months [22]. Inventory- Led Model Marketplace Model

9. AES Institute Of Computer Studies 8 Funding: Funding collected by Flipkart over the years [13]. Big Billion Day: 2014: 6th October 2014, was an unexpected day for flip kart. Flip kart wanted to be that day as big day for them and great day for customers. But at the end it was unpleasant day for both flip kart as well as customers. Founders took the responsibility of that flop show day and apologized to each and every flip kart customers for their unpleasant experience. Actually they were looking forward to fulfill the dreams of millions Indian Shopper customers through amazing deals and offers on which they worked hard 4,00,000 by founders 2009: $1million from venture capital 2010: $10million from Tiger Global 2011: $20million from Tiger Global 2012: $150million from MIH and ICONIQ capital 2013: $200million from all existing inversto 2014:$700milli on from 50 investors.

10. AES Institute Of Computer Studies 9 several months ago but result was not fruitful. There was groundbreaking approach and interest shown by the shoppers on that day, which created huge traffic. Flip kart accepted that they were not adequately prepared absolute scale of the event they also accepted that they didn’t source enough products and deals in advance to carter to customer requirements. On that day 1.5 million people shopped, which was unpredictable for flip kart. They took the responsibilities of all failure events like Price Changes, Out-of-Stock Issues, Cancellations, and Website Issues. Flip kart’s journey was/is purely based on customer trust; customer satisfaction is their topmost priority. After facing such huge failure Flip kart apologized their customers this shows their passion for fulfilling customer’s satisfaction [23]. 2015: Flipkart was again recently back with Big Billion DAYS. They weren’t de motivated with one day failure but instead that failure made them work passionately for customers and they were back with big billion days which was from 13th to 17th of October. As an app-only shopping event these days had exciting offers and discounts across 70 product categories for customers. To overcome last year’s failure this year Flipkart worked seamlessly. Bansal said that "We have opened new fulfillment centers across the country to guarantee efficient delivery. We have also ramped our technology and supply chain support to meet the huge customer demand.... We have also roped in our partner banks to give Flipkart customers exclusive offers during 'Big Billion Days," This eight-year-old company claims to offer about 30 million products across 70 categories, including books, media, consumer electronics and lifestyle. With 50-million registered users and 33,000 employees, the portal gets about 10 million hits daily and delivers eight million shipments per month. Hence, one day failure brought huge success this year for flip kart and again they won the trust of their customers [20].

11. AES Institute Of Computer Studies 10 Competitors: Amazon, Snap deal, EBay, Google, Alibaba Groups, Junglee Corporation, SD, Rediff, Tradus, Quikr, Kobo, Jabong. Acquisitions  2010: We Read, a social net based book recommendation platform [10].  2011: Mime360, a digital media company.  2011: Chakpak.com, a Bollywood news site that provides various updates, news, photos and videos. Flip kart acquired various Chakpak’s digital catalogue which consists of 40,000 filmographies, 10,000 movies and close to 50,000 ratings.  2012: Letsbuy.com is an Indian Online Shopping website to buy Mobile Phones, Cameras, Laptops, Home Appliances and other Electronic gadgets.  2014: Acquired Myntra.com which is an e-commerce company that sells fashion and other lifestyle products; it was an estimated 20 billion (2,000 crore, about US$319 million) deal.  2015: Flipkart acquires a Bangalore-based company AdiQuity, which is a leading Mobile Ad network company  2015: Flipkart acquires a mobile marketing start-up Appiterate; it’s a mobile engagement and marketing automation company.  2015: Tied up with Mumbai Dabbawalas for faster delivery. Launching Mobile App: "We are focusing on mobile. There is a huge market, 900 million people today have mobile phones in the country... However, there is no timeline on shutting down any other format," Flipkart chief product officer PunitSoni told reporters [11]. Founders shared their review as: “More than 75% of our traffic is from mobile. We have over 30 million registered users clocking over 10 million visits per day. With these statistics we see it a natural move to focus on how to get the best of the data and leverage on mobile. We can also do a lot more justice to our sellers by enhancing our platform’s capabilities for them.”

12. AES Institute Of Computer Studies 11 Foresight of Flipkart:  Mobile: one of the most prominent devices to bring revolution among our daily life (mobility). There is massive increase in number of internet as well as mobile users. Hence, Flipkart has to definitely hit this sector and make use of its mobility to get more customers.  Data: Is the core ingredient, any company that doesn’t make use “Data” in effective way will become lame. Analyzing massive amount of data helps to know the needs of customer, and customer can get personalized shopping experience.  Platform: A podium where seller and customer can communicate smoothly, it is beneficial for both sellers as well as customers. The business aspect Flipkart is currently aiming three main domains – 1. Commerce – the customer and seller side where the online shopping is taking place. 2. Supply chain – the logistics, inventory and employee management to fulfill the commerce part. 3. Advertisements – to reach massive user base and to access their buying patterns flip kart has decided to aim advertisement more adequately. Binny says, “Right now, sellers do not have their destiny in their control and there’s only so much they can do to get discovered by the prospective customers. Ads will help sellers and brands with the discovery among its targeted audience. Not only for Flipkart seller, but for outside people also it is equally useful given the great insights we have on our users.”[21] Campaigns: Below are the few slogans that Flipkart has used as a part of its campaigns:  In June 2015, Flipkart has launched a nationwide campaign, to educate sellers about taking their business online. The campaign ‘Apne Sapne Jee Kar Dekho’ aims at educating manufacturers /entrepreneurs about the advantages of getting their business up on Flipkart’s platform [31].  May 2015: “Smart shopping an App away”.  “Ab har Wish hogi Puri”  Nahin Khareeda? #AchhaKiya'  “Flipkart Thanks you”

13. AES Institute Of Computer Studies 12 Awards and Recognitions: 2011:  By CNBC TV18 for Top 3 Campaigns of the Year  Financial Express: Top 10 Marketers of the Year [14] 2012:  Best e-Commerce Website - IAMAI Indian Digital Awards by IAMAI  Popular choice - Online Electronics Retail - TechLife Awards  IAMAI Internet Entrepreneur of the Year  CNBC Young Turks Internet Company of the Year  Featured in the US Fortune 40 under 40 power list (Sachin and Binny Bansal)  IAMAI Best E-commerce website 2013:  ABP Retail Brand of the Year  Pitch Brand Award for Marketing Innovation  ET Entrepreneur of the Year (Sachin Bansal) 2014:  Spencer Stuart & ET - India's top 40 under 40 (Sachin and Binny Bansal)  The Flipkart's mobile shopping app has been selected for inclusion in the App Store Best of 2014.  Sachin Bansal and Binny Bansal featured in 2014 India Today power list.  Fortune India - 40 Under 40 (Sachin and Binny Bansal)  E-tailing India B2C Marketplace of the Year  Pitch Top 50 - Brand of the Year 2014  Flipkart's Customer Operations becomes the first ISO 9001:2001 certified customer service unit in the e-retail sector 2015:  Flipkart Legal team won the best legal team award for E-commerce industry at the Legal Era awards 2015

14. AES Institute Of Computer Studies 13 SWOT Analysis: Strength  24*7 Customer Service Support.  Availability of EMI Option [15]  Multiple Payment Methods.  Price Reduction / Discounted Prices.  Next Day Delivery Option.  E Vouchers and E-gifts Availability.  Better Search Engine Optimization. Weakness  Less internet knowledge / Usage in the small cities.  Early out of stock of Products.  Negative perception about online transactions.  No delivery in remote areas.  Gross Loss is increasing.[16] Opportunities  High Growth in E-Retail Sector.  More securities for online transactions provided.  Global Availability and Accessibility.  Mobile Application development for online portal. Threats  Government Policies.  Increase competition from national as well as international players.  Still not profitable.

15. AES Institute Of Computer Studies 14 Interesting Facts: 1. Sachin and Binny are not related. 2. FlipKart used to operate out of an office, paying rent of like 8,000/- per month. It was a time when they had no power backup, almost no-windows and no AC. [24] 3. Flipkart Brand is not Indian! Legally, since it is registered in Singapore and majority of its shareholders are foreigners, Flipkart is not an Indian company. As foreign companies are not allowed to do multi-brand e-retailing in India, Flipkart sells goods in India through a company called WS Retail. 4. Flipkart was the 1st to give “Cash on Delivery” option. 5. First book sold at Flipkart was John Woods' Leaving Microsoft to Change the World. 6. Back in 2007, this is how the site looked like: 7. Smartphone Moto G ( were sold 20,000 units within hours of launch on Flipkart) 8. Moto E, Moto X, smartphone Xiaomi Mi3 (sold out first batch within 39 minutes and second batch in 4 second then they got pre-registration as booking volume was very high) [25]. 9. Stood Second position, in the List of Cheapest Mobile Store 2013: Flipkart.com. 10. Registered Users : 26 million 11. Daily Visits by users : 4 million daily visits 12. Delivering Shipments : 5 million shipments delivered per month 13. Market Share : 4.9 per cent market share in 2013 ( Amazon – 1.6 and eBay – 1.2)

16. AES Institute Of Computer Studies 15 14. On the third day of Flipkart’s Big Billion Day sale, Bansal and most of Flipkart’s top employees have decided to do some of the deliveries in Bangalore personally over the next 15-20 days [26]. 15. Flipkart and Amazon, both companies do not deliver in Noida, because the "order abuse cases in these regions is higher than the rest of India." [27] 16. Flipkart has provided paternity leave system for it’s male employees i.e. company will provide paternity leave for 10 days either before the child’s birth or within six months after child’s birth [28]. 17. Flipkart believes in empowerment of women, hence it will hire more women candidates, they will be given chance to perform leadership duties. And will also provide perks like six month paid leave plus four months open working option with salary to mothers [29]. 18. Women employees of Flipkart will be provided with transport reimbursement gain of R 600 per day during last two months of pregnancy. They will also be allowed to a reserved parking slot for 2 months before and after child delivery. 19. The e-trailer is also working on a proposal to pay 50% of day care charges for children up to 4 years of age. 20. On 14th Oct 2015 (i.e. Big Billion day), 4 Lakhs mobile were sold. 21. 6/10 date of Big Billion Day marks the number of the flat no (6/10) from where Flipkart operations were started 7 years back. [30] Conclusion: After having bumpy smooth ride throughout past seven years, Flipkart has made marvelous achievement, when Sachin and Binny started Flipkart they had never ever imagined such huge success, but yes they did it. Whether it is $2.5 billion in funding raised from 16 investors in 11 rounds, the $12 billion valuation, or the 33,000 employee strength; the e-commerce gigantic has conquered every direction. From achieving a $1B valuation in 2012 to being valued at almost $12B, the company’s excelling growth in the past two years signifies the determined efforts put by the team and the immense potential of Indian startups. After conquering ecommerce castle the next aim of flip kart is to conquer data and mobile front. Massive data + advanced technologies and rich resources = Flipkart’s Future. In above formula massive data and advanced technologies and rich resources can work as miracle weapons for Flipkart as with help of these weapons they can now lead in data, mobile and platform.

17. AES Institute Of Computer Studies 16 References: 1. http://www.startupdunia.com/interview/interview-with-flipkart-founder-binny- bansal-776 2. https://en.wikipedia.org/wiki/Sachin_Bansal 3. http://successstory.com/companies/flipkart 4. http://yourstory.com/2014/08/sachin-bansal-flipkart-journey/ 5. http://yourstory.com/2010/05/sachin-bansal-and-binny-bansal-founders-flipkart/ 6. https://www.tofler.in/basiccompanyinfo/U72200KA2008PTC048012 7. http://economictimes.indiatimes.com/industry/flipkart-countrys-largest-online- bookstore/articleshow/6108317.cms 8. http://economictimes.indiatimes.com/articleshow/6108317.cms?utm_source=co ntentofinterest&utm_medium=text&utm_campaign=cppst 9. http://yourstory.com/2013/01/5-challenges-that-an-early-stage-e-commerce- startup-face-in-the-indian-e-commerce-industry/ 10. http://knowstartup.com/2015/08/flipkart-the-success-story/ 11. http://timesofindia.indiatimes.com/tech/tech-news/With-Ping-Flipkart-brings- social-networking-to-app/articleshow/48668533.cms 12. http://www.worldwidejournals.com/ijar/file.php?val=February_2015_1422883561_ _88.pdf 13. https://en.wikipedia.org/wiki/Flipkart 14. http://www.flipkart.com/s/press 15. http://www.rtechreview.info/2013/09/flipkarts-strategy-on-amazon-entry- into.html 16. http://www.slideshare.net/amiteshg/swot-analysis-of-flipkart-internet-private-ltd 17. http://techguruswaraj.in/flipkart-big-billion-day-2015-sale-deals-offers/ 18. https://www.techinasia.com/visenze-partnership-flipkart-image-recognition- ecommerce/ 19. http://timesofindia.indiatimes.com/tech/tech-news/With-Ping-Flipkart-brings- social-networking-to-app/articleshow/48668533.cms 20. http://gadgets.ndtv.com/apps/news/flipkart-big-billion-days-sale-to-be-app- only-start-october-13-745975 21. http://yourstory.com/2015/03/flipkart-binny-bansal-mobile-data-platform/ 22. http://articles.economictimes.indiatimes.com/2015-03-19/news/60286677_1_ws- retail-binny-bansal-flipkart-spokesperson 23. http://yourstory.com/2014/10/flipkart-big-billion-day/ 24. https://www.quora.com/What-are-some-of-the-less-known-facts-about-Flipkart 25. http://www.dailydifferentfacts.com/interesting-facts-about-flipkart/

18. AES Institute Of Computer Studies 17 26. http://tech.firstpost.com/news-analysis/flipkart-co-founder-and-ceo-sachin- bansal-is-doing-deliveries-in-bengaluru-284895.html 27. http://www.huffingtonpost.in/2015/07/16/flipkart-amazon-noida_n_7808720.html 28. http://www.indiatimes.com/news/india/10-companies-in-india-that-take-great- care-of-their-employees-243744.html 29. http://www.businessinsider.in/Flipkart-is-trying-its-best-to-retain-women- employees-Heres-how/articleshow/47893400.cms 30. http://www.businessinsider.in/Why-Flipkart-Chose-Today-For-Its-Big-Billion-Day- Sale/articleshow/44478322.cms 31. http://yourstory.com/2015/06/flipkart-campaign-educate-sellers/

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