Project Report on
MARKETING STRATEGIES OF FLIPKART
In partial fulfillment of requirement for the Award of Degree of M.Com
Subject: Marketing Strategies & Plans
Submitted By: Mr. Vicky Singh
Roll No. 08 M.Com. Part – I, I, Semester - I
Under the Guidance of: Prof. Mr. Prakash Mulchandani
SMT. CHANDIBAI HIMATHMAL MANSUKHANI COLLEGE
ULHASNAGAR – 421003 421003
UNIVERSITY OF MUMBAI 2014 – 2015 2015
This is to certify that, Mr. Vicky Singh of M.Com Part completed the project in
I, has successfully
–
Marketing Strategies & Plans” titled “Marketing
“
Strategies of Flipkart ” ” under my guidance for the academic year 2014-15. The
information submitted submitted is true and original as per my knowledge.
Mr. Prakash Mulchandani (Internal Guide)
Prof. Gopi Shamnani (Coordinator, (Coordinat or, M.Com)
Dr. Padma V. Deshmukh (I/C Principal)
________________ ________________ External Examiner
This is to certify that, Mr. Vicky Singh of M.Com Part completed the project in
I, has successfully
–
Marketing Strategies & Plans” titled “Marketing
“
Strategies of Flipkart ” ” under my guidance for the academic year 2014-15. The
information submitted submitted is true and original as per my knowledge.
Mr. Prakash Mulchandani (Internal Guide)
Prof. Gopi Shamnani (Coordinator, (Coordinat or, M.Com)
Dr. Padma V. Deshmukh (I/C Principal)
________________ ________________ External Examiner
DECLARATION
I, Mr. Vicky Singh student of SMT. CHANDIBAI HIMATMAL MANSUKHANI COLLEGE, ULHASNAGAR studying in M.Com Part – I, Semester – I, hereby declare that I have completed this project on “Marketing Strategies Of Flipkart” Marketing Strategies & Plans” Plans” for the subject “ Marketing
in the academic year 2014-
15.The information submitted is true and original to the best of my knowledge.
_______________ Mr. Vicky Singh
ACKNOWLEDGEMENT
The satisfaction, which accompanies the successful completion of the project, is incomplete without the mention of a few names. We take this opportunity to acknowledge the efforts of the many individuals who helped us make this project possible.
We would like to express our sincere gratitude to our Prof. Sunil Lalchandani for giving us an opportunity to work under her esteemed guidance which helped us to improve upon our lacunae during the project research. We are very grateful to her for providing us with every possible opportunity & freedom to learn and explore. We are deeply indebted to her for her suggestions, constant inspiration and encouragement.
EXECUTIVE SUMMARY
The concept of e-commerce is downloading at a fairly rapid pace in the psyche of the Indian consumer. In the metros, shortage of time is a big driver for online shopping. On the other hand, accessibility to a variety of products makes audiences from smaller towns and cities opt for the online route. Major retailers face challenges in stocking their stores adequately. Often, customers are unable to purchase items of their choice, thus prompting them to resort to e-retailers. Flipkart has accorded a lot of importance in trust building exercise that is why it has a strong Customer Support Team which helps the customers with the website guidance and resolving issues. Flipkart uses its in-house logistics (FKL) as well as third party logistics (3PL) services as the logistics is one of the most important for a success of any ecommerce venture. Along with the logistics, reverse logistics of Flipkart is also well developed with a 30 day return policy and flipkart bearing courier charges for returned products. Flipkart when it started employed the consignment model of procurement as it was the most risk free way to operate but then they changed to Inventory model to ensure superior delivery times. But with foreign direct investment (FDI) favoring the marketplace model in April2013, Flipkart changed its business model to marketplace model. WS Retail a pet project of Flipkart now handles the inventory and warehouse management. Flipkart has continued to fare very well in terms of the delivery time because of their developed supply chain management and dedicated customer support team to ensure customer delight. This causes them to build a lot of slack into their existing systems causing higher costs at several points in the supply chain. How they address this challenge is what will determine their future success.
INDEX Sr.No
Particulars
1
Introduction
2
Funding
3
Acquisition
4
Market Overview
5
SWOT Analysis of Flipkart
6
Major Competitors
7
Market Segmentation
8
Market Positioning
9
Marketing Strategies of Flipkart
10
Suggestions
11
Conclusion
12
Bibliography
INTRODUCTION
Things are easier said than done! To realize our dreams and that also in such a grand manner is really a tough task. The founders of Flipkart have probably conquered their dreams with the amazing success of Flipkart. Flipkart is something which has really opened up the Indian e-commerce market and that also in a big way. Flipkart was co-founded by Sachin Bansal and Binny Bansal in Oct 2007. Both are graduates from IIT-Delhi and have prior work experience in Amazon.com They both were solid coders and wanted to open a portal that compared different e-commerce websites, but there were hardly any such sites in India and they decided to give birth to their own e-commerce venture - Flipkart.com Thus was born Flipkart in Oct 2007 with an initial investment of 4 lac (co-founders savings). It was never going to be easy since India has bad past experiences with e-commerce trading. It was not an easy segment to break into, people were very particular in paying money for something which they had not seen and received. The trust was missing in the Indian customers. So what Flipkart had to do was to instill trust and faith in their customers. And they did exactly the same, will discuss more on how they did so later in the post. Flipkart began with selling books, since books are easy to procure, target market which reads books is in abundance, books provide more margin, are easy to pack and deliver, do not get damaged in transit and most importantly books are not very expensive, so the amount of money a customer has to spend to try out one's service for one time is very minimal. Flipkart sold only books for the first two years. Flipkart started with the consignment model (procurement based on demand) i.e. they had ties with 2 distributors in Bangalore, whenever a customer ordered a book, they used to personally procure the book from the dealer, pack the book in their office and then courier the same. In the initial months the founder's personal cell numbers used to be the customer support numbers. So, in the start they tried their best to provide good service, focus on the website - easy to browse
and order and hassle-free, and strove hard to resolve any customer issues. Since there were not any established players in the market, this allowed them a lot of space to grow, and they did in fact grew very rapidly. Flipkart had a revenue of 4 crore in FY 2008 - 2009, 20 crore in FY 2009 - 2010, 75 crore in FY 2010 - 2011, and the revenue for FY 2011 - 2012 which ends on 31 Mar 2012 is expected to be 500 crore. This is indeed a massive growth. The company targets revenues of 5000 crore by 2015. The company started from 2 employees and now has around 4500 employees. Flipkart started with consignment model as discussed above, since most of the customer issues like delivery delays etc. result from procurement model, the company started opening its own warehouses as it started getting more investments. The company opened its first warehouse in Bangalore and later on opened warehouses in Delhi, Kolkata and Mumbai. Today the company works with more than 500 suppliers. As on date more than 80% orders of Flipkart are handled via warehouses which help in quick and efficient service. A humble beginning from books, Flipkart now has a gamut of products ranging from: Cell phones, laptops, computers, cameras, games, music, audio players, TV's, healthcare products, washing machines etc. etc. Still, Flipkart derives around 50% of its revenue from selling books online. Flipkart is the Indian market leader in selling books both offline and online, it enjoys an online share of around 80%. The electronic items have a large number of players like Naaptol, Letsbuy, Indiaplaza, Tradus, Infibeam, Yebhi etc. The electronic market share is distributed among them in different unknown proportions. India has around 13.5 crore internet users today where as the number of homes with Cable and Satellite (C&S) television is 10.5 crore. The expected internet users will reach a figure of 30 crore by 2014 and C&S homes are expected to be 14 crore by 2014. Thus India has a tremendous internet growth and with the customers getting accustomed to e-commerce, the future of ecommerce sector is definitely rosy. An approximated 25 lac people have transacted online this year, the number is all set to increase with time. Also to mention most of the Flipkart customers use internet from PC's/Laptops to order goods. The use of mobile internet is very less at the moment, but with the advent of smart phones the use of mobile internet for e-commerce transactions will soar with time. India has 8 crore mobile net users at the moment, the number is expected to swell to 22.5 crore by 2014.
Interesting Statistics about the company
As of today, Flipkart employs over 4500 people.
It experiences 2 million unit sales and 4 million unique visitors per month with sales growing at 25% per month, eyeing a $50 million run rate.
With close to 11.5 million titles, Flipkart is the largest online book retailer in India with 80 per cent market share.
It has a registered user base of two million customers and ships out as many as 30,000 items a day, clocking daily sales of Rs 2.5 crore.
Flipkart is rapidly expanding its network of warehouses, distribution centers, procurement operations and 24/7 customer support teams. The company even has its own delivery network in 27 cities and is set to expand this even further by next year.
FUNDINGS
Initially funded by the Bansals themselves with 4 Lakhs(INR).
Flipkart has since then raised two rounds of funding from venture capital funds Accel India (in 2009) and Tiger Global Management (up to the tune of US$10 million) (in 2010).
Private equity firms Carlyle and General Atlantic are in talks to jointly invest about $150 million to $200 million in Flipkart, according to sources.
In July 2013, Flipkart raised USD 160 million from private equity investors.
In October 2013, it was reported that Flipkart had raised an additional $160 million from new
investors
Dragoneer
Investment
Group, Morgan
Stanley
Wealth
Management, Sofina SA and Vulcan Inc. with participation from existing investor Tiger Global.
On 26 May 2014, Flipkart announced that it has raised $210 million from Yuri Milner‘s DST Global and its existing investors Tiger Global, Naspers and Iconiq Capital.
In early July 2014, it was also highly speculated that Flipkart was in negotiations to raise at least $500 million, for a likely listing in the US for 2016.
On 29 July 2014, Flipkart announced that it raised $1 billion from Tiger Global Management LLC, Accel Partners, and Morgan Stanley Investment Management and a new investor Singapore sovereign-wealth fund GIC.
ACQUISITIONS
2010:
WeRead, a social book discovery tool. The stated goal was to give Flipkart a social recommendation platform for buyers to make informed decisions based on recommendations from people within their social network. 2011:
Mime360, a digital content platform company. 2011:
Chakpak.com is a Bollywood news site that offers updates, news, photos and videos. Flipkart acquired the rights to Chakpak‘s
digital catalogue which includes 40,000 filmographies, 10,000 movies and close to 50,000 ratings. Flipkart has categorically said that it will not be involved with the original site and will not use the brand name. 2012:
Letbuy.com is India‘s second largest E-retailer in electronics. Flipkart
bought the company for an estimated US$ 25 million.
2014:
Acquired Myntra.com in an estimated INR 2,000 crore deal.
MARKET OVERVIEW India has an internet user base of about 250.2 million as of June 2014. The penetration of e-commerce is low compared to markets like the United States and the United Kingdom but is growing at a much faster rate with a large number of new entrants. The industry consensus is that growth is at an inflection point. Unique to India (and potentially to other developing countries), cash on delivery is a preferred payment method. India has a vibrant cash economy as a result of which 80% of Indian ecommerce tends to be Cash on Delivery. However, COD may harm e-commerce business in India in the long run and there is a need to make a shift towards online payment mechanisms. Similarly, direct imports constitute a large component of online sales. Demand for international consumer products (including long-tail items) is growing much faster than in-country supply from authorized distributors and e-commerce offerings. India's e-commerce market was worth about $2.5 billion in 2009, it went up to $6.3 billion in 2011 and to $14 billion in 2012. About 75% of this is travel related (airline tickets, railway tickets, hotel bookings, online mobile recharge etc.). Online Retailing comprises about 12.5% ($300 Million as of 2009) India has close to 10 million online shoppers and is growing at an estimated 30% CAGR vis-à-vis a global growth rate of 8 – 10%. Electronics and Apparel are the biggest categories in terms of sales. Key drivers in Indian e-commerce are:
Increasing broadband Internet (growing at 20% MoM) and 3G penetration.
Rising standards of living and a burgeoning, upwardly mobile middle class with high disposable incomes
Availability of much wider product range (including long tail and Direct Imports) compared to what is available at brick and mortar retailers
Busy lifestyles, urban traffic congestion and lack of time for offline shopping
Lower prices compared to brick and mortar retail driven by disintermediation and reduced inventory and real estate costs
Increased usage of online classified sites, with more consumer buying and selling secondhand goods
India's retail
market is
estimated at $470 billion in 2011 and is expected to grow to $675 billion
by 2016 and $850 billion by 2020, – estimated CAGR of 7%. According to Forrester, the ecommerce market in India is set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57% between 2012 – 16. As per "India Goes Digital", a report by Avendus Capital, a leading Indian Investment Bank specializing in digital media and technology sector, the Indian e-commerce market is estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable portion (87%) of this market today. Online travel market in India is expected to grow at a rate of 22% over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-tailing industry is estimated at Rs 3,600 crore (US$800 mn) in 2011 and estimated to grow to Rs 53,000 Crore ($11.8 billion) in 2015. Overall e-commerce market is expected to reach Rs 1, 07,800 crores (US$24 billion) by the year 2015 with both online travel and e-tailing contributing equally. Another big segment in ecommerce is mobile/DTH recharge with nearly 1 million transactions daily b y operator websites.
SWOT ANALYSIS OF FLIPKART
Strength:
Top Indian ecommerce portal
Diversified into electronic goods
Two VC investment to build its own delivery system thereby reduce delivery time
Cash on delivery which is making 60% of its income
Industry condition: very high potential
Investor‘s trust
Services and warehousing
Payment options
Established brand
Weakness:
Coordination with suppliers and courier was tough
Price biasing to maintain the margins ( e.g. Low price for the best seller book and more price for the least wanted)
24/7 customer care, thus even mid night is to delivered within 24 hours
Entry of international on-line competitors in Indian market
Customers are not comfortable with online payment
Not profitable operationally
Time to build confidence among the customers
Middle management retention issues.
Opportunities:
Already working towards customer delight will obtain customer loyalty gradually
Supplier database interface with flipkart website for JIT procurement
Mobile internet usage is increasing there by chances of increase in sales through mobile shopping.
Development of m-commerce in the e-market
Increasing internet penetration
Target social medias to reach young population
High interest among VC/PE.
Threats:
Small players and emerging competitor
In capabilities to manage certain costs like delivery cost, bank charges
High competition from major international online retailers
Capture of alternative market by competitors
Major players like Amazon
MAJOR COMPETITIORS
Amazon.com is an American international electronic commerce company with headquarters in
Seattle, Washington, United States. It is the world's largest internet company, based on revenue and number of employees.
Snapdeal.com is an online marketplace, headquartered in New Delhi, India. The company was
started by Kunal Bahl and Rohit Bansal, in February 2010.
eBay Inc. , is an American multinational corporation and e-commerce company, providing
consumer-to-consumer sales services via Internet. It is headquartered in San Jose, California, United States.
HomeShop18 is an online and on-air retail and distribution venture of Network 18 Group, India.
HomeShop18 was launched on 9 April 2008 as India's first 24-hour Home Shopping TV channel.
Yebhi.com is an Indian Online shopping E-commerce portal for Home, Lifestyle & Fashion e-
retailer, launched in the year 2009.
MARKET SEGMENTATION The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment. Few companies are big enough to supply the needs of an entire market; most must breakdown the total demand into segments and choose those that the company is best equipped to handle. The four basic market segmentation-strategies are based on
GEOGRAPHIC SEGMENTATION -
CATERS TO TIER 1, TIER 2 AND TIER 3 CITIES
DEMOGRAPHIC SEGMENTATION -
75% of online users between the age group of 15-34 years.
Flipkart targets mainly the youth of the country,
BEHAVIOURAL SEGMENTATION –
Web friendly people.
PSYCHOGRAPHIC SEGMENTATION –
Flipkart concentrates on more Psychographic, which helps in deciding where to display ads online
They target online shoppers and people who don‘t online shop (thus TVC to encourage them)
MARKET POSITIONING
An effort to influence consumer perception of a brand or product relative to the perception of competing brands or products. Its objective is to occupy a clear, unique, and advantageous position in the consumer's mind.
Points of parity: •
Easy locating of products
•
Competitive prices.
•
No hassles of going to shops personally and shop for products
•
Availability of various products on one platform
•
Discount on purchases.
•
Home delivery
•
Gifting services
•
Cash on delivery
•
Availability of liquor
•
Flipifts
•
Academic related books
Points of Difference: •
Flipkart membership cards for premium customers
•
Vernacular language
•
Better user interface-one drag approach
MARKETING STRATEGIES
Word of mouth (initial marketing even now they want to satisfy customer so they come back for more)
Good use of SEO
―We DO NOT
sell old books or used books. All the books listed at Flipkart.com are new
books. The books listed at Flipkart.com are NOT available for free download in ebook or PDF format‖
Thus when you search free ebooks or pdf books old or used books flipkart will be displayed.
Good use of SEM
Ads at proper places and use pay per click to pay for ads
Very easy web interface
Payment convenience
Cash/card on delivery – there by encouraging students and people with no credit/debit card to purchase in flipkart, with mobile internet penetration there is chances of capturing rural market (60% revenue by COD)
EMI – by targeting price sensitive customers
Wallet – customer can recharge money online and purchase then and when needed those entering details always is rectified, target heavy purchase and lux ury customer
Customer conversion rate is so high more than 70%
Personalization of the user page
Product recommendation with your previous purchases
Poters 5 forces –
Bargain power of suppliers (low)
Bargain of buyers (high)
Threat of New entries (high)
Threat of substitutes (Low)
Industry rivals (Medium)
Product: •
Aims most segments except automobiles and groceries.
Website is great, easy to use, easy to browse through theproducts, add products to wishlist or to a cart, get productreviews and opinions, pre-order products, make convenientpayments using different methods and better Search EngineOptimization.
Quality level of the products is absolutely fine E.g., If we take thequality of books available in Crossword and Landmark is sameas the quality of books ordered by Flipkart.com.
Products are packed in such a way that they are Tamper proof,weather proof and breakage proof.
Product line on Flipkart.com have warranties as promised by thebrand of the product if applicable. E.g., Bajaj MX 2 1200 WattsIron with 2 Years Bajaj India Warranty and extra paid warranty forthe particular brand is available if applicable.
30-day replacement guarantee for faulty products. (Video for the same).
Product line is extensive one as discussed earlier. Derives around 50% of its revenue from selling books online.
Flipkart as a brand has already differentiated itself as a pioneer in book retailer, trustworthy in terms of swift services and secure payments, quality-oriented products with lower price offerings than retail market), innovative product line, customer delightful service which has helped them to form its own distinctive image better than few unheard competitors such as Tradus.in and Indiaplaza.com.
Some unique product features of Flipkart.com such as
Wishlist
E-gift voucher
Flipkart launched a new Electronic Wallet feature that allows shoppers to purchase credit to their Flipkart account using creditor debit cards, and can subsequently be utilized to make purchases on the site, as and when required.
Affiliate
Price –
Price of the product taking account of various expenses such as Supplier expenses, Transportation expenses, Packaging expenses, Shipping expenses, Courier expenses, inventory maintenance expense, office and stationery expenses, sales and advertisement expenses, taxes, depreciation, discount allowances and many more expenses.
Roughly about 5-7% profit per book orders which indicates that generation of revenue is on volume basis.
Differentiated themselves by giving best selections, best services at lowest best possible prices.
Discounts up to 35% across all categories.
Upper edge in competitive pricing.
Special discount for loyal customers and regular buyers.
As shipping is within India the shipping cost reduces, which indirectly reduces the overall cost for the company and thus company offers less price as compared to other players. Free shipping overall Indian boundaries after certain amount of purchase done from the site and even without minimum purchase for the regural and loyal customers. For expensive products transit cost is borne by company. Maximum discounts in the occasional time like Diwali, Eid etc.
Pricing would always differ if you are buying from e-commerce sites and Shopping Malls, reason for that is the middleman charges and the cost of store which increases the price of the particular product.
Place –
Channel type: Words of mouth (if we can say that) which has been key driver for their growth.
When an order is placed they either serve the order from their inventory or procure the book on demand from various suppliers and then deliver the customer.
As on date more than 80% orders of Flipkart are handled via warehouses which help in quick and efficient service.
We deliver orders in 1 day in Tier-I cities and 2-3 days in Tier II cities and 3-5 days Tier III cities
Shipping and Courier would act as intermediaries in this process.
Delivery services through e-kart and postal services
Tie ups with local vendors and courier firms (thereby avoiding octroi charges)
Company owned warehouse in major cities near airport
Trying to achieve minimum returns
If the courier can‘t delivery to the location the product is shipped through government
post
Warehouses are located in the following cities, often near airports
Bangalore Chennai Delhi Hyderabad Mumbai Noida Pune Kolkata
Promotions -
Employees of divisions like Website, Business Planning and Analytics, ERP, Business Development, Product Management and Marketing, Supply-Chain Management and Customer Support are generating revenue for it.
Selection Criteria at Flipkart:-While years of experience are always beneficial for a candidate, Flipkart's focus is to hire those who are able to consistently raise the bar and introduce a variety of innovation to move this organization forward. As Flipkart grows, we feel it is absolutely necessary that our employees are also able to grow professionally with the organization.
Adequate Training as per their roles and responsibilities is given to them accordingly and incentives.
Telephone Sales force is only 2% of the total employees focusing to reduce the unsold/goods not much in demand.
Majority of Flipkart are employed in Customer support division.
It is the only customer support division in India having 24x7customer support functioning for issues such as regarding choice of the product to purchase, shipping, courier, how to order on website, mode of payment, gift voucher, order status &cancellation and returns.
Having even tie up with Skype for the same on the website for user delight.
Unique tool of Sales Promotion is Affiliate on their website.
Publicity is by words of mouth publicity generating trust and accountability to users.
As internet/web strategy used Google Ad-words, blogs, social networking sites such as twitter, facebook, used Google ad-words, e-mail campaigns.
Advertising focused on first Words of mouth from 2007-10 as the advertisement cost was not affordable
Focused on Print and TVC from 2011 onwards.
Launched their first campaign in tvc on 05/05/2011 with the concept of Granny, Mouse, Magic Presenting the Concept of Getting Books Delivered at Doorsteps at just one click of The Mouse through a Fairy-Tale.
Launched their second campaign “No kidding. No worries” that we are serious about our promises we make and experience shopping safely, delightfully and with ease.
With the increasing trend of online shopping, retail websites are aiming to earn huge profits in India. Flipkart has announced Monday, October 6, 2014 as the 'Big Billion Day‘. The online shopping website claims that its customers will be offered ‗big‘ discounts on October 6. The company has also made sure that its online ads connect to the Indian audience. It gives out punch lines like ‗India loves everything big- big moustache, big weddings, big cars etc‘. In another online ad, it mentioned that its sales are bigger than garba and kumbh mela, which hits the cultural string of India.
In its recent teaser ad, Flipkart has also announced ‗Bumper discounts at 90% off‘ and you can
even shop for things that are priced as low as Rs 99. Flipkart is also offering cash back on transactions with particular banks.
Packaging: "People are paying attention to packaging and presentation as a crucial part of their shopping experience." "Packaging really matters when it comes to the overall shopping experience and I like to order more if a well packed and presented parcel is delivered,"
As the country's largest e-commerce company, Flipkart.com ships almost 5 million items a month, 3 million of them in corrugated boxes. These containers now come printed with board games and puzzles — Sudoku, Snakes and Ladders, Ludo — or animal prints as it seeks to leverage that last-mile connect for brand recall.
Different packaging for different product to ensure safe delivery
Flipkart the name goes with the online cart
Design and packaging is common so customers can relate it to the company
People:
Service people, Sales Clerks, Delivery drivers, Managers, Complaints department, Accounting, Warranty people, Technical people, all work for the customer ease, customer satisfaction and customer delight.
Customer service centers for complaints and review.
Investors
Employees schemes
Flipkart Employees With Stock Options Becomes Crorepati
About 400 of the employees who own a stake have now become crorepatis, according to someone with direct knowledge of the employee stock option scheme at Flipkart, which received $1 billion, approximately Rs 6,000 crores, in funding last month, valuing it at $7 billion. About one-fourth of Flipkart‘s 7,000 full-time employees own a stake in the company. At the senior-most level, nearly 20 employees who are at the grade of senior vice-president or above and joined over two years ago are now dollar millionaires, meaning their stock options are worth at least Rs 6 crore on paper. The firm‘s stock options get vested over four years. Flipkart declined to provide details for the report. It is the online retail market leader‘s valuation jump
that has led to this wealth creation.
Customer Support function for an e-commerce website is one of the most important touch-
points for the business in terms of building trust, customer acquisition and maintaining customer loyalty. Flipkart‘s Customer Support team consists of call -centre agents who handle in-bound and out-
bound calls and also a team that handles e-mail queries. The entire team is based out of Bangalore and forms a core part of Flipkart‘s 6,000-strong employee base. Given that Flipkart
tries to differentiate itself on superior shopping experience and customer service is an integral part of that – Flipkart prefers to train its own support staff rather than outsourcing the function to a BPO agency. At present, a customer calls due to one of the below reasons:
Sales Assistance
General Enquiries
Product/Shipping related enquiry
One of the major reasons for these calls is Indian consumers poor familiarity with online shopping protocols. It is important to note that Flipkart tries to ensure that any order is placed within 6 clicks on the website. There is also an outbound call-centre that performs the following tasks:
Pro-actively inform customers about any delay in deliveries.
Pro-actively check the status of refunds or returns.
Inform the user in case any delivery has not been successful due to the customer not being present at his address.
Despite all the good intentions of Flipkart in providing high-quality customer service, there are several internet blogs that suggest that their service quality has dipped in the last year or so.A major reason for this could be the growth in number of customer service executives‘ not keeping pace with the increase in business volume. There could also be a problem of increased complexity in query handling due to increase in number of SKUs and product categories that would demand more rigorous training for the support staff.
Process – •
Cash on delivery
•
Debit and Credit card transactions
•
Delivery time
•
Payzippy safe payments
Returns Processing If follows a 30 day return policy. This policy which is primarily aimed to build trust with the consumers, has led to many customers duping Flipkart. For example there have been several incidents when a customer buys a book only to read it and then return it within 30 days. Similar incidents have been observed with mobile phones as well. Flipkart, through its data management systems, has tried to identify such frauds. Return of a product to Flipkart can happen if the 3rd party cannot deliver to the address or the customer does not accept the product. Some orders are cancelled while the delivery is being processes by the courier company. Such orders are not recalled but delivered to the address and then cancelled. Customers can call the customer support and courier back the product to Flipkart. The delivery cost is borne by Flipkart. When a customer requests return of a product, there are 3 paths this request can take: 1. Replacement: Flipkart returns the product to the supplier and obtains a replacement that is delivered to the customer. 2. Store credit: If the customer is not satisfied with the product, he or she is given store credit of the same amount. 3. Actual cash-back: Given out as cash for cash-on-delivery payment or refunded for online payment.
Future Road Map
They aim at 10 times growth and eyes at $ 1Billion sales by 2015.
They will look at bigger investments in their supply chain and technology.
Investment will be made in large warehouses and increased automation of their process, so that the product is not delayed.
They intend to enter in to various new categories and expand their current categories as well.
Everything except for groceries and automobiles will be available o n Flipkart in future.
To go further in the value chain, Flipkart is looking at associations with a larger number of suppliers and partners, both nationally and internationally.
SUGGESTIONS Flipkart has successfully placed itself into the prospects mind making it the India‘s largest online
store with huge range of products. But Flipkart still needs to work on their core competence that is books and stationery items.
With the entry of Amazon.com it will be a huge competitive market for Flipkart and hence will have to position itself better, as we still see that huge percentage of females are still unaware of Flipkart. Those female who purchase, has a very less frequency which has remained unchanged. Therefore they need to get aggressive at providing better services which can be fulfilled by reducing the delivery time, selling second hand products which will increase consumers‘
affordability much more and enhance penetration into the market.
They can even have their retail stores which can give an access to consumers to feel and analyze the products, which will help them win the consumers faith. Price will still be a factor as amazon being a huge company will use its economies of scale to remove their competitors from the market; therefore they need to be more competitive on that aspect. Be very focused on consumers and build amazing experiences for the customers.
CONCLUSION
A credible rival can do wonders to an enterprise and Flipkart is no different. The entry of Amazon in India has enabled Flipkart develop a lot of in-house innovation and organically developed best-practices - that have now become the industry standard. Flipkart began operations on the consignment model; goods were procured from suppliers on demand, based on the orders received through the website. Later, the books-to-electronics e-shop adopted the warehouse model. The company had its own warehouses, and maintained its own inventory. However in July 2013, Flipkart launched its model of marketplace just one month after Amazon launched its marketplace in India. It introduced payments brand PayZippy for online merchants and customers seeking fast, hasslefree and safe payment options. Some 70 per cent of its shipments are done by its own logistics company and about half of deliveries are on a cash-on-delivery basis. Flipkart has recently introduced the next day guarantee delivery service and shopping from its own mobile application. Given the critical mass of transactions Flipkart controls - about 100,000 a day - the company is betting that it has the volumes to lay the foundation of what will be a profitable business. Last but not the least; Flipkart has very clearly prioritized customer delight as its chief avenue for customer acquisition and retention. This causes them to build a lot of slack into their existing systems causing higher costs at several points in the supply chain. How they address this challenge is what will determine their future success.
