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The Information Technology Act, 2000 governs the basic applicability of e-commerce. India’s e commerce revenue has grown explosively over the past three years despite only 11% of Indians have access to Internet. Access to Internet: 11% Indians Online Sales Growth: &gt;50% Annually Estimate sales by 2016:$8.3 billion* Contribution to India’s GDP by 2020: 4%**
High return ratio leading to reverse logistics Preference to Cash on delivery mode due to low credit card penetration and less trust on online transactions. Such transactions are expensive for the seller. Most payment gateways have a high failure rate. This leads to loss out of business as several customers do not reattempt to do the payment. Internet penetration is low and the quality of connectivity is also poor. Smartphone penetration is not significant in India. 40% of Flipkart’s transactions are done on mobile. The customer base can be increased with higher penetration of Smartphone. Buying of a product on E-commerce websites does not allow the customers to have a touch and feel experience. Logistics is a problem in thousands of Indian towns. Due to the inaccessibility of many small towns in India is a factor driving the logistics problem. COD aggravates this problem.
Fourth successful startup company of all time by Market Capitalization, Revenue, Growth & Cultural Impact.
Flipkart was founded in 2007 by Bansal Brothers, both alumni of the IIT, Delhi. They worked for Amazon before quitting & founding their own company. In its initial years, Flipkart focused on online sales of books. Today , Flipkart is amongst the top 20 Indian Web sites and has been credited with being India&apos;s largest online bookseller with over 11 million titles on offer. In 2012, Flipkart added A.C, air coolers, stationery supplies & life style products to its product portfolio. As of today, Flipkart employs more than 5000 people. Major Acquisitions like WeRead, Letsbuy.com
Glowing Reviews Niche Product: Like Amazon has Kindle, Flipkart has come up with DigiFlip as a brand for its mobile handsets & bags Value Added Differentiation: Focus on customer & Providing Customization of Products. Aggressive marketing for the Mobile App by providing special discounts foreseeing the mobile Internet penetration in India.
Flipkart has been mostly marketed by word of mouth advertising. Customer satisfaction has been their best marketing medium. Wise Use of Search Engine Optimization (SEO) and Google Ad Words. Over 9 lakhs Facebook Page Likes Have their own SCM Company named Ekart
Flipkart&apos;s reported sales were 40 million in FY 2008–2009 200 million in FY 2009–2010 750 million for FY 2010–2011 5 billion (US$100 million) for 2011-2012 Flipkart.com is India&apos;s first billion-dollar-valued Internet Company!
First Mover Benefit: Began with strategically efficient product categories : books ,electronics Pioneering innovation :Sales of Motorola series have clocked 1 million pieces in 5 months .Currently looking to stock the leading Chinese brand ,Xiaomi Excellent service and product quality contributing to maximum amount of Credibility in the market Ease of use :Simple and user friendly interface and ease of transactions Market leader despite offering relatively high prices Discounts and free shipping Successful WOM marketing
Flipkart is a market place model while Amazon is an inventory and marketplace model. Flipkart has 1706 SKUs (Stock Keeping Unit) in stock and 4172 offers while Amazon has 1535 SKUs in stock and 2244 offers. Mobile category is quite price sensitive and fight is very intense between Flipkart and Amazon. In cameras category Amazon offers better prices than Flipkart. In Laptops category Flipkart has great advantage and they are way ahead of Amazon.
This is the dream Flipkart founders /investors are hoping for day in and day out. The question then will be about what the price will be. If we look at history, it&apos;s similar to what Ramesh Chauhan of Parle soft drinks faced when Coke was trying to enter India. He sold off 4 brands: Thumsup, Gold sport, limca and one other for a price of 750 crores when a reasonable value was more likely 275 to 300 crores. It&apos;s rumored that Flipkart founders have already asked for 2 billion USD which Amazon thought was ridiculous and turned down. This is the kind of exits current investors are hoping for. Amazon brings in its own expertise, processes, patents, IP, brand and offers superior buying experience thereby wiping flipkart out of existence. The problem which flipkart has solved( Logistics) is a commodity and can easily be replicated. The customers quickly switch to Amazon. Finally, Flipkart is sold for a small amount to Amazon. It would be disastrous for founders and investors. Amazon is not able to find its feet in the country. Flipkart finds the battle tough. If Bansals get the government to protect it. Example :Naukri Versus Monster showdown, Flipkart becomes #1 and Amazon is comfortable playing the second fiddle. LESS PROBABILITY
Flipkart Vs Amazon- A Case Study on e retailing.
a case study in e-retailing
SIEMENS Nashik Works
E-Commerce in India
IT Act, 2000
Access to Internet: 11% Indians
Growth: > 50% Annually
Sales by 2016: $8.3 billion*
Contribution to India’s
GDP by 2020: 4%**
*Crisil (Credit Rating Information Services of India Limited )
Challenges in E-Commerce
High return ratio → Reverse Logistics
High Failure Rate for most Payment Gateways
Low Internet penetration
Low Smartphone penetration
No Touch and feel experience.
Amazon: An Introduction
American International Headquartered at Seattle
Started as online bookstore
Soon diversified selling CDs, DVDs, software, electronics,
furniture, toys, etc
Mission: To be world’s largest Customer Centric
Platforms for Merchants & Associates
Many acquisition from 1998 till date
Flipkart: An Introduction
Indian e-commerce company headquartered
in Bangalore, Karnataka.
Founded by Sachin Bansal and Binny Bansal in 2007.
Initial focus on online sales of books, but later it
expanded to electronic goods etc
Multiple Payment Methods
Delivery within 2 Days
30 Days return policy
Card Swipe on
products made easy
Browsing made easy
Exclusive Launch at
(Eg., Moto E)
Sales Promotion: Flipkart
Apart from Television Commercial, Flipkart relies more
on word of mouth publicity.
Other Promotional Techniques include:
Rebate & Discounts
Quantity Deals/ Gifts
Full Finance @ 0%
The Road Ahead For Flipkart:
Niche Product: DigiFlip
Value Added Differentiation: Focus on customer &
Providing Customization of Products.
Aggressive marketing for the Mobile App
• Special Mailers
• Target Sales:
Rs. 1 Billion
Rs. 6.14 Billion
Market Place Model Inventory & Market Place Model
Camera Prices costlier Camera Prices cheaper
Laptop Prices Cheaper Laptop Prices costlier
Business Model/ Marketing
Flipkart is a Marketplace model
Sub Brand ‘DigiFlip’
Ekart Logistics for competitors
Hand to Hand Exchange via Myntra Logistics
FlipKARDs for Brand Loyal
Reward coupons for Product Reviews
Expert Advice from Tech Bloggers
Modeled Clothes as per Size Chart
Discounts. Coupons. Sale.
Develop IT Infrastructure
Complement Product Purchase
Renovate & Expand Business
Increase No. of Sellers
More features on Mobile App