VISTAS Vol. 3, No. 1, 2014, pp.

14-20 ISSN: 2319-5770

A STUDY ON CUSTOMER PREFERENCES AND ITS IMPACT

ON THE USAGE RATE OF FLIPKART—A STUDY WITH
SPECIAL REFERENCE TO CHENNAI CITY

Arun Balakrishnan M.B.1 and Tushar Soubhari2

1Assistant Professor in Commerce, Christ College, Irinjalakuda, Trichur

2Assistant Professor in Commerce,

St. Agnes Center for PG Studies & Research, Mangalore

INTRODUCTION
Online shopping, often referred to as online retailing or e-tailing, is growing every day
in India, although most studies in the past have pointed out that the process has
been rather slow and unsuccessful in gathering much steam with the Indian users.
But the trend is changing now and a good number of savvy online users are making
big purchases on the digital space. Retailers of all kinds are enhancing their product
offerings, adding in-store pickup and offering free shipping these days. They’re even
using several social media platforms to improve online sales to lure more customers.
And the results are only getting better. According to a report released on September
2010, consumers spend considerable amount of time researching about goods before
making purchases. Of course, users are careful about shopping online but a number of
them are coming back, thanks to tremendous discounts & deals retailers’ offer online
clients. In 2008, the Internet and Mobile Association of India (IAMAI) stated that the e-
commerce industry stood at Rs. 9,210 crores. Now, it is expected that this segment will
grow 30% annually. 75–80% of the market is contributed by travel portals-the and rest
is made up by online classified, e-tailing and digital downloads. 12% of the market is
constituted by online classifieds such as matrimonial and job portals.
OBJECTIVES OF THE STUDY
 To trace the background behind the ‘Flipkart’, strategies adopted for their
success.
 To identify the factors that influence the customers to favor Flipkart.
 To know the competitive advantage that Flipkart has over its competitors.
METHODOLOGY
The researcher has chosen Chennai city for the study. The samples were collected
using questionnaires from all over the city randomly. It consists of students, working
professional, and senior citizens. The sample size is 50. The study is exclusively based
on primary as well as secondary data. Bar diagrams and pie diagrams are drawn to
show the datas collected.
REVIEW OF LITERATURE
According to Pan (2007), "Purchasing Decision Process" is when the relevant
information is searched by the consumers that are motivated by the fulfillment of
demands according to personal experience and the external environment; then after
accumulating a certain amount of information, they begin to evaluate and consider;
and finally after comparison and judgment, they make the decision on certain products.
 VISTAS  15

According to Monsuwe, Delleart and Ruyter (2004), there are five external factors
to understand consumer's intention to purchase in the internet which is the
consumer personality, situational factors, product characteristics, previous online
shopping experiences and the trust in online shopping. Consumer's trait includes
their demographic factors such as age, income, gender and educational level that will
lead them to have the intention to shop online. For age factor, consumers that are
aged under 25 have more potential to shop online because of their interest in using
new technologies to search for product information and compare and evaluate
alternatives (Wood, 2002). For educational level, higher educated consumers are more
likely to use the internet for their shopping medium because they are more computer
literate (Burke, 2002). Product characteristic is also another factor that will influence
the consumer's intention to purchase in the internet. Product characteristic can be
tangible or intangible; standardized or customized. In an online context, lower
tangibility of a product is caused by the lack of physical contact and assistance in the
shopping process; consumer's intention to shop on the internet will be low when there
is a need to seek advice from a salesperson regarding the considered product
(Monsuwe et al., 2004). Products such as car, computers, perfume or lotion has the
lower potential to be purchased by the consumer because it requires more personal
knowledge and experience (Elliot et al., 2000). Another factor that influences the
consumer's intention to purchase online is the previous online shopping experiences.
Consumers will continue to shop in the internet in the future because they are
satisfied with the online shopping experience and it was evaluated positively
(Shim, Eastlick, Lotz and Warrington, 2001). Consumer's perceived risk will tend to
reduce when they are satisfied from the shopping experiences (Monsuwe, Delleart and
Ruyter, 2004). The last factor that will influence consumer's intention to purchase
online is the trust in online shopping.
COMPANY PROFILE
Flipkart is an Indian e-commerce company founded by Sachin and Binny Bansal,
headquartered in Bangalore, Karnataka. The company acts as a mediator between
sellers and customers and is regarded as the Amazon of India. Sachin Bansal & Binny
Bansal, both an alumni of IIT-Delhi with a degree in Computer Engineering was
working for Amazon.com before quitting and launching their own company
Flipkart.com. Currently it has more than 11 million titles of books and sells ~20 items
per minute. Other items include electronics, mobile, Music, Games, etc. Flipkart was
launched in 2007. It started with 4 Lakhs funding by owners themselves. Their
objective was making books available to everyone who had internet access. 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 Wood ‘Leaving Microsoft to
change the World’). Along with time, it later diversified across various categories and
in 2010 branched out to selling CDs, DVDs, mobile phones and accessories, cameras,
computers, computer accessories and peripherals, and in 2011, pens & stationery,
other electronic items such as home appliances, kitchen appliances, personal care
gadgets, health care products etc. Further in 2012, Flipkart added A.C., air coolers,
school supplies, office supplies, art supplies & life style products to its product
portfolio. Flipkart is rapidly expanding its network of warehouses, distribution
centers, procurement operations and 24 x 7 customer support teams. The company
has its own delivery network in 37 cities and is set to expand this in the current
financial year. With a team of around 4,800 members, the company operates from
offices and warehouses in seven Indian cities. Today, as per Alexa traffic rankings,
16  VISTA
AS

Flipkart is among g the top 20 Indian n Web site es and ha as been crredited with being
India's largest
l onlline booksseller with over 11 million
m title
es on offerr. It has re
egistered
sales of nearly 2.5
5 million ite
ems acrosss all catego
ories and sells
s more than 20,0 000 units
per dayy or 14 ite ems per minute.
m W
With path-bbreaking features
f liike Cash/Card on
Delivery
y, 30 Day replacemen
r nt policy an
nd EMI op ptions.
Headquaarters & itss Wings
Flipkart has its offices, warehouses
w s and cus stomer se
ervice centters acros
ss India.
Warehou uses locaated in the followwing cities
s, nearby airports like: Ba angalore-
Koraman ngala (HQ
Q), Whitefiield, Chen
nnai-Mounnt Road, Delhi,
D Hydderabad, Mumbai,
M
Noida, Pune
P and Kolkata.
K
DATA ANALYSIS
A S AND INT
TERPRETA
ATION
1. Awareness
A on FlipKarrt
Table 1: Awareness
A on
o Flipkart
Particularrs No. of Respond
dents P
Percentage
Yes 45 90
No 5 10

10
0%

yes
90% No

Fig. 1: Aw
wareness on
n Flipkart

Interpreetation
The abo
ove chart shows
s thaat 90% of the respondents are
e aware o
of Flipkart and the
remainin
ng 10% are not so.
2. Sources
S of awareness
a s on Flipka
art.
Tab
ble 2: Source
es of Awaren
ness on Flipkart
Particularrs No. of Respond
dents P
Percentage
Advertise
ement 22 44
Friends 22 44
Magazinees 4 8
Others 2 4

2
25
2
20
1
15
1
10
5
0
Advertisem
ment Frien
nds Maga
azines O
Others

Fig
g. 2: Sources
s of Awareness on Flipk
kart
 VISTAS
V  17

Interpreetation
From th
he above chhart, 44% of the res
spondents have come e to know and equaally share
an awarreness abo
out Flipkarrt through
h advertise
ements and d friends a
and the re
emaining
8% and 4% do thrrough mag gazines and
d others re
espectively
y.
3. Duration
D off Internet Usage
U Everry day.
Table
e 3: Duration
n of Interne
et Usage Eve
eryday
Particularrs No. of Respond
dents P
Percentage
1–2 Hourrs 16 32
2–3 Hourrs 12 24
> 4 Hours 22 44

44% 32%
1 Hours
1-2
2 Hours
2-3
24
4%
M
More than 4 Hou
urs

Fig. 3: Duration
n of Internett Usage Everryday

Interpreetation
The abo
ove chart shows
s thatt 32% of th
he responddents use internet ddaily for 1–
–2 hours,
24% for 2–3 hours
s and the remaining
r use intern
net for morre than 4 h
hours daily
y.
4. Purchase
P Frequency of
o productts through Flipkart.
Table 4: Purrchase Frequ
uency of Pro
oducts throu
ugh Flipkart
Particularrs No. of Respond
dents P
Percentage
Once in a Month 10 20
Once in 6 Month 22 44
Once in a Year 18 36

20%
36%
%

Once in a mo
onth
44%
Once in 6 mo
onths

Once in a year

Fig. 4: Purc
chase Frequ
uency of Pro
oducts throu
ugh Flipkart

Interpreetation
It is show
wn that 44 4% of the respondent
r ts buy from
m Flipkart once in sixx months. They are
characte erized by their
t long term expe ectations, waiting forr best tim
me and enjoy cash-
discountt offers offe
ered by thee company y. The rest of the resp
pondents aare neutral in terms
of their purchase. About 20% of them m who purc chase via Flipkart
F on
nce in a month
m are
highly agggressive, looking forr varieties and
a advising the commpany for ffuture pros
sperity.
18  VISTA
AS

5. Ranking
R of online boo
ok sellers.
Ta
able 5: Rank
king of Onlin
ne Book Selllers
P
Particulars N of Respondents
No.
1 ebay 2 Flipkart 3 Amazon.com
m 4 Jabo
ong 5 Zappos
Z
Strongly Agree 4 28
2 7 5 4
Agree 24 13 25 20 23
Neutral 13 5 14 16 12
Disagree 6 3 3 9 9
Strongly Disagree 3 1 1 0 2

30

25

20

15 Strongly Agree
10 Agree

5 Neutral

0 Disagree
Strongly Disa
agree

Fiig. 5: Ranking of Online

e Book Selle
ers

Interpreetation
86% agrree Flipkarrt to be the best. As the recen
nt study shhows, Flipk
kart is ran
nked first
best online book sellers
s in In
ndia and 30
3 th in the world (as per
p Alexa RRankings)..
6. Motivation
M to prefer Flipkart.
F
T
Table 7: Motiivation to Prefer
P Flipka
art
Particularrs No. of Respond
dents P
Percentage
Prices an
nd Discounts 6 12
Quick De elivery 28 56
Product Quality
Q 6 12
Convenieence 8 16
Availabiliity 2 4

30
25
20
15
10
5
0
Prices Quick Product convenie availabilit
andd delivery
y quality nce y
discou
unts
Consumer Purpose of Pre
efernece 6 28 6 8 2

F
Fig. 6: Motiv
vation to Prrefer Flipkarrt
 VISTAS
V  19

Interpreetation
80% of the respon ndents are e motivated and theyy commen nt, “When we think of books
we thinkk of Flipka
art.” This is
i due to the
t quick delivery
d sy
ystem and the trust that the
company y has buillt on theirr customerrs. They deliver
d the products within 3 business
b
days froom the da ate of theeir order. Whateverr be the situation,
s the produucts are
delivered
d on time.
7. Customer
C s
satisfaction
n with Flip
pkart servic
ces.
Table 7: Customer
C Sa
atisfaction with
w Flipkarrt Services
Particularrs No. of Respond
dents P
Percentage
Yes 46 92
No 4 8

S
SATISFACTIO
ON

8%

YES
NO
92%

Fig. 8: Customer
C Sattisfaction with
w Flipkartt Services

Interpreetation
It is sho
own that 92% of th he respond
dents are satisfied with
w the s
services offfered by
Flipkart. Expectinng the sam
me, the co
ompany has
h ed to imprrove their ways of
decide
reachingg their cus
stomers.
FINDINGS
 Everyone
E prrefers Flipkart the MOST
M as th
hey are con
nvenient.
 Easily
E apprroachable.
 Quick
Q deliv
very.
 Low
L shippin
ng cost.
 Better
B custo
omer serviice.
 Cash
C on delivery.
 Itt was founnd that Fliipkart is competing
c with new brands. T
Though itss market
shhare is fluctuating day
d by day,, they are accepting
a c
change to improve in
n future.
 M
Marketing strategies
s t
that worke
ed for urba s do not necessarily work for
an markets
th
he rural on
nes.
 More
M youth
h shop thro
ough Flipk
kart than old people.
 Surely,
S Flip
pkart will soon
s becom
me the Indiia’s AMAZO
ON.
 Customers
C are highly
y satisfied.
20  VISTAS

CONCLUSION
Flipkart the Amazon.com of India is on its peak now with a huge amount of profit.
Those who are confident in doing online purchase do shopping through flipkart.com.
There is an opportunity that amazon.com will buy Flipkart in the future. Indian
e-retail market is yet in the nascent stage with very few internet shoppers and with
customer preferences not very favorable to e-shopping phenomenon. With the
challenges around, only the innovation of services and growth of internet users will
define the success of e-retailing companies.
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