INTERNET MARKETING AND E-TAILING

GROUP PROJECT PART-1

Submitted to: Prof. Nimit Gupta
Submitted by:
Abhishek Pramanik (PGFA1103) Aamukta (PGFA1101) Jyoti Anand (PGFA1121) Reema Sri
vastav (PGFB1137) Sameer Vivian Joseph (PGFB1139)

Table of contents
Introduction ...................................................................
...................................................................3 About .....
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...........................................................4
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............................................. 4 Acquisitions ...................
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............................... 5 Business Results .............................
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.............. 6 Locations .....................................................
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. 6 Cash on delivery ...........................................................
................................................................ 6 COD Target ..
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................................................. 6 3 pillars ..................
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....................................... 6 USP ..................................
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............................. 7 Customers ......................................
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.............. 7 STP............................................................
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.... 7 Positioning: ............................................................
...................................................................... 7 Marketi
ng Strategies:..................................................................
................................................. 7 Poters 5 forces ............
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................................. 8 SWOT : .....................................
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.................... 9 7 Ps of marketing ........................................
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9
Market Share ...................................................................
....................................................................... 11 Compe
titors Analysis ................................................................
............................................................. 13
2

Fu

Introduction
Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka.
Its being touted as Indias answer to Amazon. Founded by Sachin Bansal and Binny Ba
nsal (not related to each other) in Oct 2007, Flipkart has catapulted to one of
Indias most popular e-commerce sites and undoubtedly as the most popular online d
estination 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 q
uitting and finding their own company. Initially they used word of mouth marketi
ng to popularize their company. A few months later, the company sold its first b
ook 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 mil
lion titles on offer. Flipkart broke even in March 2010 and claims to have had a
t least 100% growth every quarter since its founding. The store started with sel
ling books and in 2010 branched out to selling CDs, DVDs, mobile phones & access
ories, cameras, computers, computer accessories and peripherals, pens & office s
upplies, other electronic items such as home appliances, kitchen appliances, per
sonal care gadgets, health care products etc.
Interesting Statistics about the company

As of today, Flipkart employs over 4500 people It experiences 2 million unit sal
es 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 re
gistered user base of two million customers and ships out as many as 30,000 item
s 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 cus
tomer 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 D
ay replacement policy and EMI options, Flipkart has now made it possible for any
one across the country with internet access to shop online. The Flipkart experie
nce is characterized by the intuitive 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 mi
llion, with the first round being around $10 million and the second round being
$20 million.
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Acquisitions
2010 WeRead, a social book discovery tool. The stated goal was to give Flipkart
a social recommendation platform for buyers to make informed decisions based on
recommendations from people within their social network. 2011 Mime360, a digital
content platform company. 2011 Chakpak.com is a Bollywood news site that offers
updates, news, photos and videos. Flipkart acquired the rights to Chakpaks digit
al catalogue which includes 40,000 filmographies, 10,000 movies and close to 50,
000 ratings. Flipkart has categorically said that it will not be involved with t
he original site and will not use the brand name. 2012 Letbuy.com is Indias secon
d largest E-retailer in electronics. Flipkart bought the company for an estimate
d US$ 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 50
0 Crore (US$ 100 million) mark as Internet usage in the country increases and pe
ople get accustomed to making purchases online. On average, Flipkart sells nearl
y 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. Ware
houses are located in the following cities, often near airports.
Bangalore, K
ataka 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 hour
s the rate decreases then the extra money will be paid back
COD Target
Students / people with no debit and credit cards Geographically small town peopl
e
3 pillars
Website to get queries and orders Suppliers book distributor Logistics courier s
ervice 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:
Target:
Flipkart concentrates on more Psychographic, which helps i
n deciding where to display ads online They target online shoppers and people wh
o dont online shop (thus TVC to encourage them) All internet users and shoppers
Positioning:
Customer delight (low price, free shipping, replacement of faulty products) No k
idding 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 th
e books listed at Flipkart.com are new books. The books listed at Flipkart.com a
re NOT available for free download in ebook or PDF format Thus when you search fr
ee 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 encou
raging students and people with no credit/debit card to purchase in flipkart, wi
th mobile internet penetration there is chances of capturing rural market (60% r
evenue by COD) EMI two types of installments (3 / 6 months) there by targeting p
rice sensitive customers
Wallet customer can recharge money online and purchase
then and when needed those entering details always is rectified, target heavy pu
rchase and luxury customer Customer conversion rate is so high more than 70% Per
sonalization of the user page Product recommendation with your previous purchase
s
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 entr
y barriers, but sustaining is tough
Threat of substitutes (Low)
Diminishing brick and mortar model Increasing custom
er ease and customer satisfaction
Industry rivals (Medium)
Many small players (snapdeal, naaptol ..) Entry of inte
rnational players like Amazon into India
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SWOT :
Strength
Top Indian ecommerce portal Diversified into electronic goods Two VC in
vestment to build its own delivery system thereby reduce delivery time Cash on d
elivery which is making 60% of its income
Weakness
Coordination with suppliers and courier was tough Price biasing to main
tain 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 loya
lty gradually Supplier database interface with flipkart website for JIT procurem
ent Mobile internet usage is increasing there by chances of increase in sales th
rough mobile shopping.
Threats:
Small players and emerging competitor Major players like Amazon In capa
bilities to manage certain costs like delivery cost, bank charges

7 Ps of marketing
Product :
Appearance the ease in the website interface even for the first visit
r Quality checking of the product before packing (visual test) Packing different
packing(eg. Bubble pack for electronic items) Brands all brands integrated in o
ne website Warranty one year warranty from the manufacturers side Service & suppo
rt guarantee delivery of undamaged product or else replacement in 30 days.
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Price:
Place:
Tie ups with local vendors and courier firms (thereby avoidin
roi charges) Company owned warehouse in major cities near airport Trying to achi
eve minimum returns If the courier cant delivery to the location the product is s
hipped through government post Special discount As shipping is within India the
shipping cost reduces Seasonal discounts Free shipping For expensive products tr
ansit cost is borne by company
Promotion:
SEO and SEM Word of mouth marketing TVC lately to encourage non-onlin
e shoppers More online marketing like FB, Twitter, linkedin Hiring people with h
igh sense of ownership, generalist with more attitude to learn
Packaging:
Different packaging for different product to ensure safe delivery Fli
pkart the name goes with the online cart Design and packaging is common so custo
mers can relate it to the company
Positioning:
Customers feel Flipkart is cheap, on time delivery, replacement; th
e online myth is gradually eradicated Competitors see Flipkart as the market lea
der, 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 dep
artment, Accounting, Warranty people, Technical people, all work for the custome
r 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 mil
lion 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 a
nd conversion rates along with growth in visitors. The top retail sites shown ab
ove 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 Amaz
on.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. Snap
deal 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% onli
ne 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 a
s well. Consumer goods, sports/outdoor products and retail food sub categories h
ave also shown early growth signs. Consumer goods being a popular category among
horizontal retailers is still way below global averages. Flowers/gifts/greeting
s is the only subcategory which has shown de-growth of over 33% in the last 12 m
onths. Vertical e-Commerce categories including baby products, apparel, shoes an
d 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 ca
mpaigns reaching out the right target audience have increased visitation and hen
ce conversion among retailers. The average transaction sizes among some of the t
op 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) No
w watch carefully for the patterns.
Infibeam is flat. Infibeam and Myntra arent growing enough compared to their comp
etitors. 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 t
hen on a good upward projectile. Flipkart grew rapidly in 2011 traffic peaked fr
om 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 flipk
art took 6 months to build from TV in the last 2 months.
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The TV ad is great. Indians love drama, dont we? And that has probably got more l
ikes and mental note than the creative & cheerful ads of flipkart (they were cut
e but still not there yet for India). Sadly enough, Myntra hasnt been able to get
even a small bump in its traffic all these days with Crores poured into TV camp
aign. So was it the awesome TV ad? Of course not. As someone rightly commented o
n 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 e
commerce. 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 c
heck 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 isnt any of the travel portals or s
ongs.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 soft
ware! Now, of course thats shady. It is a whopping 12% of India traffic as report
ed 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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