FLIPKART- Business Model

8/10/2019 FLIPKART- Business Model

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FROM AMAZON TO ALIBABNIYATHACHITILAPILLY

PHILIPTHOMAS

PRAVEENRICHARD


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VISION & MISSION

VISION- TOBECOMEAMAZONOFINDIA

MISSION- PROVIDINGADELIGHTFULCUSTOMEREXPERIENCE


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GENESIS

FLIPKARTISANE-COMMERCECOMPANYFOUNDEDIN2007, BYSACHINANDBINN

ITOPERATESEXCLUSIVELYININDIA, WHEREITISHEADQUARTEREDINBANGALORE,KARNATAKA.

ITISREGISTEREDINSINGAPORE, ANDOWNEDBYASINGAPORE-BASEDHOLDINGC

FLIPKART'SWEBSITEISONEOFTHE10 MOSTVISITEDWEBSITESININDIA.

FLIPKARTHASLAUNCHEDITSOWNPRODUCTRANGEUNDERTHENAME"DIGIFLIP", OCAMERABAGS, PEN-DRIVES, HEADPHONES, COMPUTERACCESSORIES, ETC.

LEGALLY, FLIPKARTISNOTANINDIANCOMPANYSINCEITISREGISTEREDINSINGAPOMAJORITYOFITSSHAREHOLDERSAREFOREIGNERS.

BECAUSEFOREIGNCOMPANIESARENOTALLOWEDTODOMULTI-BRANDE-RETAILININDIA, FLIPKARTSELLSGOODSININDIATHROUGHWS RETAIL.

OTHERTHIRD-PARTYSELLERSORCOMPANIESCANALSOSELLGOODSTHROUGHTHEPLATFORM.


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BUSINESSOBJECTIVES

FLIPKART AIMSTOBECOMETHELARGESTRETAILEROFINDIA. FLIPKARTWANTSTOACROSSALLCATEGORIES, EXCEPTINGROCERIESANDAUTOMOBILES.

THECEO SAID. OURTARGETISNOTJUSTTHOSEWHOSHOPONLINE. WEWANTTHIGHLIGHTTHECONVENIENCEOFE-COMMERCETOTRADITIONALOFFLINESHOPPERTHUS, HELPGROWTHEMARKET.

2020LARGESTRETAILERININDIA, ENTERGLOBALMARKETS


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SEPT

TechnologicalSocial:

EconomicalPolitical

Government support forincreasing penetrationin India, Tax benefits tocorporates, Increase instock holding % forforeign investors incompanies (2012)

Resistance againstforeign retailers

Booming IndianEconomy,Increasing spendingpower, Skyroketingfuel prices, Base ofinternet usersmultiplied by 10times in 6 years

Advent of mobileshopping, Increasingpenetration rate ofbroadband and wirelessinternet, Bettermanaged E-Commercesite for ease, privacyand advancements innet banking

Better comfort leveland trust in onlineshopping, High priorityon time andconvenience ,Improving usage ofbroadband and highcomputer literacy.


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ORGANIZATIONAL APPRAISAL

Competitors:(High)

Low entry barriers

Huge Market.

New Entrants:(Moderate)

Low CapitalInvestment.

High TechnologicalPlayers

Buyer:(Low)

Presence of MultiplePlayers and

traditional retailstores.

Cheap old or usedbook vendors.

Substitutes: (Low)

Traditional Book stores.

Advent of Ebookreaders like Ipad and

Kindle

Supplier : (High)

Large supplierbase.

Decreasing

popularity ofprinter books.


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SWOT ANALYSIS

Strengths

Supply chain

Quick turnaround

Advertisement &Promotion

Strategic acquisition

Huge reach

Weakness

Delivery

Internet penetration

Payment gateways

Higher costs

Opportunities

Growth in E-tail

Growth in e-Book

Mobile Apps

Broadband Penetration

Threats

New players


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MERGERS AND ACQUISITION

STARTEDOPERATIONIN 2007 ANDBREAKEVENINAUGUST2010

TOGROWINORGANICALLYTHROUGHACQUISITIONS

HAVETHEIROWNSCM COMPANYNAMESEKART

ACQUISITIONS

2010: WEREAD, ASOCIALBOOKDISCOVERYTOOL.

2011: MIME360, ADIGITALCONTENTPLATFORMCOMPANY.

2011: CHAKPAK.COM, ABOLLYWOODNEWSSITETHATOFFERSUPDATES, NEWS, PHOTOSANDVIDEOACQUIREDTHERIGHTSTOCHAKPAK'SDIGITALCATALOGUEWHICHINCLUDES40,000 FILMOGRAPHIEMOVIESANDCLOSETO50,000 RATINGS. FLIPKARTHASCATEGORICALLYSAIDTHATITWILLNOTBEINTHEORIGINALSITEANDWILLNOTUSETHEBRANDNAME.

2012: LETSBUY.COM, ANINDIANE-RETAILERINELECTRONICS. FLIPKARTHASBOUGHTTHECOMPANYESTIMATEDUS$25 MILLION.

LETSBUY.COMWASCLOSEDDOWNANDALLTRAFFICTOLETSBUYHAVEBEENDIVERTEDTOFLIPKART.

2014: ACQUIREDMYNTRA.COMINANESTIMATEDINR 2,000 CROREDEAL.


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MARKETING STRATEGIES

FLIPKARTHASBEENMOSTLYMARKETEDBYWORDOFMOUTHADVERTISING.

CUSTOMERSATISFACTIONHASBEENTHEIRBESTMARKETINGMEDIUM.

FLIPKARTVERYWISELYUSEDSEO (SEARCHENGINEOPTIMIZATION) ANDGOOGLEWORDSASTHEMARKETINGTOOLSTOHAVEAFARREACHINTHEONLINEWORLD.

FLIPKART.COMOFFICIALFACEBOOKPAGEHASCLOSETO9 LACLIKES.

FLIPKARTLAUNCHEDASERIESOF3 ADSWITHTHETAGLINE- "NOKIDDINGNOWOAKIDCANDOIT, YOUCANALSODOIT.

ALLINALLTOCREATEAGREATCUSTOMEREXPERIENCE.


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MARKETING STRATEGIES


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BUSINESS LEVEL STRATEGY

IN2007, FLIPKARTSTARTEDWITHSELLINGBOOKS. THEFIRSTBOOKSOLDATFLIPKART.COMWASJOHNWOODS' LEAVINGMICROSOFTTOCHANGETHEWORLDTODAY

IN2010, THEYADDEDTOTHEIRCATALOGUE, MEDIA(INCLUDINGMUSIC, MOVIESANDGAMES) ANDMOBILEPHONESANDACCESSORIES

IN2011, PRODUCTLAUNCHESINCLUDEDCAMERAS, COMPUTERS, PENS& OFFICESUPPLIES, COMPUTERACCESSORIES, HOMEANDKITCHENAPPLIANCES, PERSONALCARE,HEALTHCARE, GAMINGCONSOLES, AUDIOPLAYERSANDTELEVISIONS.

INOCTOBERANDNOVEMBER2011, FLIPKARTACQUIREDTHEWEBSITESMIME360.COMANDCHAKPAK.COMLATER, INFEBRUARY2012, THECOMPANYREVEALEDITSNEWFLYTEDIGITALMUSICSTORE. FLYTE, ALEGALMUSICDOWNLOADSERVICEINTHEVEINOFITUNESANDAMAZON.COM, WILLOFFERDRM-FREEMP3 DOWNLOADS.

IN2012, PRODUCTLAUNCHESINCLUDESHEALTH& BEAUTYPRODUCTS, LIFESTYLEPRODUCTSWHICHINCLUDESWATCHES, BELTS, BAGS& LUGGAGE.

INJULY2012 FLIPKARTANNOUNCEDTHELAUNCHOFITSIN-HOUSEBRANDDIGIFLIP.DIGIFLIPISABRANDOFDIGITALACCESSORIESWITHPRODUCTSLIKELAPTOPBAGS,LAPTOPSLEEVESANDCAMERABAGSAMONGOTHERS

Cost

Heavy discounts on booksFree shipping for

purchases above Rs. 300Consumer

Communication

Advertisements viaSearch Engine

Optimization TransparentCommunication

Once the customerplaces an order, progress

can be tracked


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STRATEGIC CHOICE

WHYBOOKSWERETHEFIRST

CHOICE?


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STRATEGIC CHOICE

STARTEDSELLINGBOOKS: WHYBOOKSWERETHEFIRSTCHOICE?

LOWERTRANSACTIONSIZE

BETTERSHELFSIZE

SHIPPINGANDHANDLINGOFBOOKSISEASY

TOEMERGEASAPIONEERINBOOKRETAILINGRATHERTHANVENTURINGCOMPARISONSENGINE

GROWTHSTORY:

STARTEDWITHBOOKSANDWENTONTOADDNEWPRODUCTS

2 EMPLOYEES, 2 SUPPLIERSTO4800 EMPLOYEESANDMORETHAN600 SUPPLIERS

HAVETHEIROWNINTERNALCOURIERSERVICESCALLEDFLIPKARTLOGISTICS


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FINANCE

2007

THEFOUNDERSHADSPENT 4,000,000 ONLYFORMAKINGWEBSITETOSETUPTHEBUSINESS.

2009

FUNDINGFROMVENTURECAPITALFUNDSACCELINDIAUS$1 MILLION ANDTIGERGLOBALUS$1

2012,

FLIPKARTANNOUNCEDTHECOMPLETIONOFITS4THROUNDOF$150 MILLIONFUNDINGFROMMIOFNASPERSGROUP) ANDICONIQ CAPITAL.[

2013

FLIPKARTRAISEDANADDITIONAL$200 MILLIONFROMEXISTINGINVESTORSINCLUDINGTIGERGLONASPERS, ACCELPARTNERSANDICONIQCAPITALFLIPKARTRAISEDUSD 160 MILLIONFROMPRIVAINVESTORS.
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STRATEGIC EVALUATION

FLIPKART'SREPORTEDSALESWERE

40 MILLIONINFY 20082009

200 MILLIONINFY 20092010

750 MILLIONFORFY 20102011

5 BILLION(US$100 MILLION) FOR2011-2012

FLIPKART.COM, THECOUNTRY'SFIRSTBILLION-DOLLAR-VALUEDINTERNETCOMPANY, ISSURELYINPERPETUALEXCITEMENT.

FLIPKARTISASTORYTHATCOMESFROMSMARTWORKANDANITISPOSSIBLE ATTITUDE.

THEUSP OFFLIPKARTISTOPROVIDETHECONSUMERSWITHTHEBESTONLINESHOPPINGEXPERIEN

THESEARETHEREASONSWHYMANYLOVEFLIPKART. SOMEPEOPLECALLINGITASAMAZONOFIFITSTOFLIPKART.


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STRUCTURAL

Sachin Bansal

Binny Bansal

KarandeepSingh(joined the

company in January2012), Flipkart

CFO, is the one whohandles all aspects

of finance andcorporate

governance.

Ravi Vora(joined inMarch

2011),VP (marketing),seems to be the right

hand man of theBansals.

MekinMaheshwari (since Sept

2009), president(engineering)atFlipkart.com, is

responsible for leadingthe engineering team,

scaling up Flipkartsbusiness at a rapid

speed

Ankit Nagori(in Flipkartsince 2010), VP

(categories), is an IIT-Guwahati alumnus who

heads multiplecategories and helps the

e-tailer build its teamacross multiple offices.

Sameer Nigam(joined in

October 2011), VP(digital business), was

the founder ofMime360.com, a digital

distribution platformsolution which hostsmusic streaming for

labels like Saregama,Universal Music andInreco, which was

acquired by Flipkart lastOctober.

Maneesh Mittal(Flipkart since Se

2009),VP (operaB.Tech from II

Although he joincommerce comgeneral manage

on to becom(warehousing)

finally elevatedyear
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CHALLENGES FACED BY FLIPKART

Initially when they started out, it wasnt easy for them to earn the trust of the cu

Not having the display advantage, the browsing feature and not being able to promotional activities are some other obvious challenges.

The discomfort of paying by cards, on account of security fears is another challenow tried to address that by introducing the cash-on-delivery option.

The fact that highest number of orders and sales get registered during weekend

tough at times for logistics and customer service.

The fact that Flipkart has to work 24 / 7 and the customer perceptions around itdifficulty (For example, the customer places an order at 12 am and counts the nudelivery right from then!)


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WHAT MAKES IT STAND OUT?

The procurement model is at the heart of Flipkartssuccess, as most delays or tthis part of business.

Flipkart employed consignment model i.e. procurement based on demand.

It is the robust logistics at Flipkart that sets it apart from other wannabe e-com

An amazingly well-oiled warehousing and delivery system..

They offer a huge range of titles (more than 7 million) which really sets them aof the crowd.


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FLIPKARTSSUCCESS MANTRA!

Great customer service

Easy to use website, hassle free payment system

Cash on delivery/Card on delivery mode of payment

Focused on user experience


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PREPAID WALLET FEATURE


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THREATS TO ITS CROWN

There are no major foreseeable threats in the future.

The company has built a great brand name, they just have to maintain and enha

Need to keep introducing more products, adapting to the changing needs of the time.

The entry of Amazon.com in 2012 in the Indian e-commerce space has been cite

challenge to Flipkart.

However We think that Flipkart is a respected Brand name in India and should bwith Amazon.

Remember Amazon being a very big company can bring in serious competition tAmazon can bear more losses in the beginning to gain customer base.


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BIG BILLION DAY


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BUSINESS MODEL OF FLIPKAR


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THANK YOU

FLIPKART- Business Model

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