INTERNET MARKETING AND E-TAILING
GROUP PROJECT PART-1
Submitted to:
Submitted by:
Prof. Nimit Gupta
Abhishek Pramanik (PGFA1103) Aamukta (PGFA1101) Jyoti Anand (PGFA1121) Reema Srivastav (PGFB1137) Sameer Vivian Joseph (PGFB1139)
Table of contents
Introduction ......................................................................................................................................3 About ................................................................................................................................................4
Funding ........................................................................................................................................ 4
Acquisitions .................................................................................................................................. 5
Business Results ........................................................................................................................... 6
Locations ...................................................................................................................................... 6
Cash on delivery ........................................................................................................................... 6
COD Target ................................................................................................................................... 6
3 pillars ......................................................................................................................................... 6
USP ............................................................................................................................................... 7
Customers .................................................................................................................................... 7
STP ................................................................................................................................................ 7
Positioning: .................................................................................................................................. 7
Marketing Strategies:................................................................................................................... 7
Poters 5 forces ............................................................................................................................. 8
SWOT : ......................................................................................................................................... 9
7 P’s of marketing ........................................................................................................................ 9
Market Share .......................................................................................................................................... 11 Competitors Analysis ............................................................................................................................. 13
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Introduction Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka. It’s being touted as India’s answer to Amazon. Founded by Sachin
Bansal and Binny Bansal (not related to each other) in Oct 2007, Flipkart has catapulted to one of India’s most popular e-commerce sites and undoubtedly as
the most popular online destination for books within a short span of three years .
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About Flipkart was established in 2007 by Sachin Bansal and Binny Bansal, both alumni of the Indian Institute of Technology Delhi. They worked for Amazon.com before quitting and finding their own company. Initially they used word of mouth marketing to popularize their company. A few months later, the company sold its first book on flipkart.com - John Woods' Leaving Microsoft to Change the World. Today, as per Alexa traffic rankings, Flipkart is among the top 30 Indian web sites and has been credited with being India's largest online bookseller with over 11 million titles on offer. Flipkart broke even in March 2010 and claims to have had at least 100% growth every quarter since its founding. The store started with selling books and in 2010 branched out to selling CDs, DVDs, mobile phones & accessories, cameras, computers, computer accessories and peripherals, pens & office supplies, other electronic items such as home appliances, kitchen appliances, personal care gadgets, health care products etc. 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
What sets it apart?
With path-breaking features like Cash/Card on Delivery, 30 Day replacement policy and EMI options, Flipkart has now made it possible for anyone across the country with internet access to shop online. The Flipkart experience is characterized by the in tuitive user .
Funding The company was initially self-funded, with co-founders Sachin and Binny Bansal spending Rs 400,000 ($9056) to setup the business. They later raised two rounds of funding from Accel Partners and Tiger Global Management to the tune of $31 million, with the first round being around $10 million and the second round being $20 million.
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Acquisitions 2010
WeRead, a social book discovery tool. The stated goal was to give Flipkart a social recommendation platform for buyers to make informed decisions based on recommendations from people within their social network. 2011
Mime360, a digital content platform company. 2011
Chakpak.com is a Bollywood news site that offers updates, news, photos and videos. Flipkart acquired the rights to Chakpak’s digital catalogue which includes 40,000 filmographies, 10,000 movies and close to 50,000 ratings. Flipkart has categorically said that it will not be involved with the original site and will not use the brand name. 2012 Letbuy.com is India’s second largest E-retailer in electronics. Flipkart bought the company for
an estimated US$ 25 million.
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Business Results Flipkart's reported sales were 4 Crore in FY 2008-2009, 20 Crore in FY 2009-2010 and 75 Crore for FY 2010-2011. In FY 2011-2012, Flipkart is set to cross the 500 Crore (US$ 100 million) mark as Internet usage in the country increases and people get accustomed to making purchases online. On average, Flipkart sells nearly 20 products per minute and is aiming at generating a revenue of 5000 Crore (US$ 1 billion) by 2015.
Locations The company's headquarters is located in Bangalore's Koramangala neighbourhood. Flipkart has offices, warehouses and customer service centres across India. Warehouses are located in the following cities, often near airports.
Bangalore, Karnataka
Chennai, Tamil Nadu
Delhi
Kolkata, West Bengal
Mumbai, Maharashtra
Noida, Uttar Pradesh
Pune, Maharashtra
Kochi, Kerala
Cash on delivery
The COD should be more than 50K
EMI – min 4K period is 3 or 6 months
If in 72 hours the rate decreases then the extra money will be paid back
COD Target
Students / people with no debit and credit cards
Geographically small town people
3 pillars
Website to get queries and orders
Suppliers – book distributor
Logistics – courier service tie ups
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USP
Usability
Support
Model is partnership with local book vendors
Customers
Price sensitive
Experimental shoppers
Trust is the most need full thus their first product was books cheap and easy to delivery.
STP Segmentation:
All internet users and shoppers
Target:
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)
Positioning:
Customer delight (low price, free shipping, replacement of faulty products)
No kidding no worries
Online megastore
One stop solution
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 DONOT 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
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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 – two types of installments (3 / 6 months) there 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 luxury 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)
The readers are reducing thus suppliers are in weak position
Inventory turnover is lower, thus more inventory again flipkart is at the upper hand
Bargain of buyers (high)
Not many buyers
Best deals online
Cash on delivery
One stop solution
Faster delivery with free shipping cost
Threat of New entries (high)
Market potential for this industry is high
Low entry barriers, but sustaining is tough
Threat of substitutes (Low)
Diminishing brick and mortar model
Increasing customer ease and customer satisfaction
Industry rivals (Medium)
Many small players (snapdeal, naaptol ..)
Entry of international players like Amazon into India
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SWOT : 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
Weakness
Coordination with suppliers and courier was tough
Price biasing to maintain the margins ( eg. 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
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.
Threats:
Small players and emerging competitor
Major players like Amazon
In capabilities to manage certain costs like delivery cost, bank charges
7 P’s of marketing Product :
Appearance – the ease in the website interface even for the first visitor Quality – checking of the product before packing (visual test) Packing – different packing(eg. Bubble pack for electronic items) Brands – all brands integrated in one website Warranty – one year warranty from the manufacturer’s side Service & support – guarantee delivery of undamaged product or else replacement in 30 days.
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Price:
Special discount As shipping is within India the shipping cost reduces Seasonal discounts Free shipping For expensive products transit cost is borne by company
Place:
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
Promotion:
SEO and SEM Word of mouth marketing TVC lately to encourage non-online shoppers More online marketing like FB, Twitter, linkedin Hiring people with high sense of ownership, generalist with more attitude to learn
Packaging:
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
Positioning:
Customers feel Flipkart is cheap, on time delivery, replacement; the online myth is gradually eradicated Competitors see Flipkart as the market leader, with the acquisition of letsbuy.com General public want to try it once for its creative TVC is making people curious to experience flipkart.
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.
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Market Share
Retail category penetration has increased to 60% reach and has grown to 37.5 million unique visitors a month, an overall growth of 43% annually. The growth has come across all retail categories and most of them show promising transactions and conversion rates along with growth in visitors. The top retail sites shown above in India have each seen a growth of over 100% in the last 12 months.
Amazon is the most visited retail site with most of the traffic slipt among Amazon.com, ImDB and Junglee.com. Flipkart leads the way among the online retailers in India with 7.4 million unique visitors a month,growing at 431% annually. Snapdeal has been close second with 6.9 million uniques. Jabong and Myntra have been competing closely in the lifestlye category with over 5.3 million uniques each. HomeShop18 has over 4 million uniques a month.
Apparel has been the fastestgrowing subcategory in retail and reaches 13.4% online users i n I n d i a . Comparison shopping, as research of retail online grows continue to dominate. Most of the
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comparison shopping sites show a growth over 75% Y-o-Y and will continue to grow as more categories of retail come online. Travel category has shown this trend with high overlap among OTAs and this trend is expected among online retailers as well. Consumer goods, sports/outdoor products and retail food sub categories have also shown early growth signs. Consumer goods being a popular category among horizontal retailers is still way below global averages. Flowers/gifts/greetings is the only subcategory which has shown de-growth of over 33% in the last 12 months. Vertical e-Commerce categories including baby products, apparel, shoes and other lifestyle categories have also shown tremendous growth. Wider assortment and product availability have helped these retailers in growing business online. More retailers online have heavily depended on online marketing to scale. The online marketing spends across all content categories and effective marketing campaigns reaching out the right target audience have increased visitation and hence conversion among retailers. The average transaction sizes among some of the top retailers are as below:
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Competitors Analysis
Ecommerce India and Google Trends (Graph from Google Trends: Interesting tit-bit – try region as India & watch for the tricks from Flipkart & Infibeam in 2009) Now watch carefully for the patterns.
Infibeam is flat.
Infibeam and Myntra aren’t growing enough compared to their competitors.
Myntra had some traffic back in 2010 and went flat for next 1.5 years.
Flipkart did its rocketing in Oct 2012 when they started advertising on TV and then on a good upward projectile.
Flipkart grew rapidly in 2011 traffic peaked from Oct 2011 till April 2012 [The Panda raid].
If you looked at India only growth – Flipkart probably got significant India traffic only with TV ads & not before. The most gaping fact of the entire graph - Jabong got all the traffic that flipkart took 6 months to build from TV in the last 2 months.
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The TV ad is great. Indians love drama, don’t we? And that has probably got more likes and mental note than the creative & cheerful ads of flipkart (they were cute but still not there yet for India). Sadly enough, Myntra hasn’t been able to get even a small bump in its traffic all
these days with Crores poured into TV campaign. So was it the awesome TV ad? Of course not. As someone rightly commented on pluggd.in post – its probably the effect of aggressive email marketing (call it spam) . There are many others
who have done that in India – fashionandyou, crazeal etc. Either way, today, Jabong leads in the market share of visitors in retail ecommerce. What are the other Internet sites who advertise on TV? All the listing sites – so let us see where they stand – olx, quickr, sulekha.. You will be in for a surprise.
Classified vs. Ecommerce Traffic in India
Quikr.com has almost double the traffic as OLX.in and even Flipkart.com
If you check the estimates from Google Ad Planner (which are actually very close to real numbers from what I know) – quickr has 9% penetration in India while Flipkart has 4.3% So all the listing sites are quite ahead of Flipkart & Jabong in capturing visitors. Want to know who the big guy is – it isn’t any of the travel portals or songs.pk and not even espncricinfo.com with all the IPL heat!
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Babylon: The Real Slim Shady of India Internet? Babylon.com – the translation software! Now, of course that’s shady. It is a whopping 12% of India traffic as reported by Google. Any
marketers in the readers would now connect why Babylon.com is the 2nd or 3rd popular source in their Organic Traffic in analytics
Source:
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