DIGITAL MARKETING

FLIPKART BUSINESS MODEL

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 INDEX
SR. NO. TOPIC PAGE NO.

01. INTRODUCTION- FLIPKART 4

02. REVENUE MODEL 5

03. REVENUE SCALIBILITY 6-7

04. GROWTH DRIVERS 8-9

05. COST STRUCTURE 10-12

06. MARGIN STRUCTURE 13-15

07. KEY OPERATIONAL METRICS TO TRACK 16-17

08. DIFFERENTIATION (FUTURE ENHANCEMENT) 18-19

09. LEARNING FROM GLOBAL MARKET 20-21

10. KEY SOURCE OF EFFICIENCY 22

11. ELEMENT OF INNOVATION 23-24

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 INTRODUCTION
Flipkart is an Indian e-commerce company, headquartered in Bangalore, Karnataka, India,
and was incorporated in Singapore as a private limited company. Flipkart was founded in
October 2007 by Sachin Bansal and Binny Bansal, alumni of the IIT, Delhi and former
Amazon employees. The company initially focused on online book sales with country-wide
shipping, before expanding into other product categories such as consumer electronics,
fashion, home essentials, groceries, and lifestyle products.
The service competes primarily with Amazon's Indian subsidiary and domestic rival
Snapdeal. As of March 2017, Flipkart held a 39.5% market share of India's e-commerce
industry. Flipkart has a dominant position in the apparel segment, bolstered by its acquisition
of Myntra, and was described as being "neck and neck" with Amazon in the sale of
electronics and mobile phones. Flipkart also owns PhonePe, a mobile payments service based
on the UPI.
In August 2018, U.S.-based retail chain Walmart acquired a 77% controlling stake in Flipkart
for US$16 billion, valuing Flipkart at around $20 billion.

THE JOURNEY

REVENUE MODEL

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Flipkart accumulates its revenue through a few channels. Let’s see how does Flipkart
make money.

COMMISSION STRUCTURES
Flipkart makes a percentage cut whenever someone sells their product to a customer. Commissions
are usually deducted from the original transaction value prior to paying out the seller who sold the
item.
The commission structures vary from item to item, they are categorized in the following;

• Low Margin branded categories: 2-5%

• High Margin branded categories: 10-25%

SHOPPING FEES (FLIPKART ASSURED PROGRAM)

Shopper saves more by availing free deliveries on orders that exceed the value of 500 Indian rupees.
The saved amounts usually are accumulated and then spent again at Flipkart.

OWN SHIPPING SERVICES – EKART

It is a department that makes all the deliveries of goods to the concerned consumer.
It costs 50 Indian Rupees for items that are less than half a KG (weight)
Flipkart also makes money using Ekart to ship products of other retailers who have customers in India
but lack logistical capabilities.

PAID ADS
The e-commerce giant has been generating a lot of money from paid ads since. It launched a digital
ads platform in 2015, which attracted businesses quickly and was generating nearly million in
monthly advertisement sales within a year. Flipkart is regarded as one of the largest digital ads
platforms in India.

COLLECTION FEES
A small payment collection fee is charged to you for all prepaid and post-paid orders that you receive.
The Collection fee will vary depending on the payment type chosen by the customer (Prepaid/Post-
paid). For a prepaid order - Based on Payment gateway, for a post-paid order - Based on cash
collection charges. The collection fee will be calculated on the final selling price of the product.

REVENUE SCALIBILITY
Successful business growth depends on a scalable business model that will increase profits over
time, by growing revenue while avoiding cost increases.
With a scalable business model, the end result isn’t even close. Revenues in a scalable business
rapidly outpace expenses. In fact, revenues are so accelerated that you could say that scaling is
about adding revenue at an exponential rate while adding resources at an incremental rate.

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This year, after the second wave of Covid-19 hit their sales in many states, ecommerce platforms
saw a gradual recovery in sales to pre-second wave sales unlike last year when sales spiked
immediately after the national lockdown.

Flipkart has estimated a growth of around 50-60% this year. This comes at a time when online
commerce adoption is increasing, with the pandemic nudging consumers across the country to try
online shopping.
Flipkart Group CEO Kalyan Krishnamurthy talked about the company’s plans to scale up verticals
like grocery and hyperlocal deliveries along with its value-focused platform Shopsy in an interview
to ET on Tuesday.

He said that Flipkart had witnessed a substantial pandemic-induced acceleration in consumer

adoption last year and in 2020. It resulted in new users coming online to make ecommerce
transactions while existing online shoppers were a lot more active on Flipkart group platforms.

The various options for selling and buying through Flipkart are through

FLIPKART WEBSITE-
The percentage commission charged by Flipkart varies from the type of product and its sales. It
ranges from 5% to 20% excluding taxes and discounts. This was the basic idea from which Flipkart
earned its online place.

THE WEB APP-

Also, Flipkart’s social commerce platform Shopsy, said it continues to witness strong growth through
its consumers, sellers and resellers from across the country. Backed by festive fervor, the platform has
seen 3.6x growth in new app downloads, crossing the 10 million mark on the play store, within five
months of its launch. Since July 2021, Flipkart said Shopsy has received an overwhelming response
from consumers and resellers across the country who hopped onto the platform for their ‘shop & earn’
needs.

SOCIAL WEBSITES-
Creating content for social media platforms to promote products, build community with their target
audience, and drive traffic to their business. With new features and platforms emerging every day,
social media marketing is constantly evolving. Its is all about meeting your target audience and
customers where they are and as they socially interact with each other and your brand.

ADVERTISED OR AFFILIATED NETWORKS-

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In which Flipkart focused on influential people rather than the target market as a whole. It identifies
the individuals that influence potential buyers and orients marketing activities around these
influencers.

Other than advertisement by Influencers. Company also carry an affiliated partner program which is a
performance-based marketing in which business rewards one or more affiliates for each visitor or
customer brought by the affiliate's own marketing efforts.

GROWTH DRIVERS
Flipkart, one of the largest online retailers in India, grew five times in volume of products sold
between 2013 and 2014. The parent firm of ecommerce giant Flipkart is based in Singapore and
operates in India through a variety of subsidiaries. Flipkart Internet makes money by charging fees for
things like marketplaces, payment gateways, delivery, and other services. In India, Flipkart also has
payment and logistics divisions.

The key growth factors that led to such commendable growth of the company and how did how
contribute towards the upwards growing graph.

LOCALISATION OF INTERNET CONTENT

According to a Google India spokesman, web content search in Hindi has increased by 155% in the

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last year, much outpacing the rise of content search in English. In the same time period, Hindi content
searches on mobile Internet increased by 300 percent. The increase in traffic in other languages was
also noteworthy. Taking the opportunity flipkart launched its interface in local languages and started
to target local retailers and rural areas too.

GROWTH IN CITIES BEYOND METROS

Outside of metros, about 20% of India's population resides in cities. Several indicators show that this
big population of city dwellers has considerable purchasing power. Flipkart focused on these areas
and expanded their business model to cater to the needs of these city dwellers. A large market was
now slowly becoming a part of the online purchasing sector and it opened up the doors to a big
revenue stream for the company.

CATALOGUING
A healthy, updated and data-rich catalogue is key to selling online successfully. Flipkart strove to
create a new ecosystem of cataloguing partners. Today, this network has expanded to encompass over
350 cataloguing partners

PACKAGING
Packaging complaints and grievances can hurt the NPS (Net Promoter Score), which is a measure of
the loyalty of a firm’s customer relationships. By employing dedicated packaging partners, Flipkart’s
marketplace team effected a sharp decline in such complaints and grievances. This also awakened the
seller community to the value of quality packaging.

THE ENTRY OF PRIVATE BRANDS

Flipkart launched its private brand, Flipkart SmartBuy, offering a selection of quality products at
affordable prices. Flipkart worked hand-in-hand with the sellers to finalize the product quality and
specifications. There were stringent checks to ensure adherence to these metrics.
All of the above creative techniques resulted in positive seller and consumer experiences, paving the
road for Flipkart's merchants to dominate the marketplace. Flipkart's DNA is hard-wired for
innovation. While the concept of an online marketplace is not new, making it a realistic reality
necessitated much more than putting in place the necessary framework and technology. Flipkart
created one of the liveliest online markets in the world by incorporating the interests of merchants and
customers into each innovative stage and process. This is simply the latest in a long line of firsts.

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 COST STRUCTURE
FLIPKART'S MARKETPLACE FEE STRUCTURE
Commission fee: Percentage of Order item value (depends on category & sub-category
Shipping fee: Calculated on the basis of product weight and shipping location
Collection fee: Payment gateway or cash collection charges for every sale
Fixed fee: A small fee that Flipkart charges on all transaction’s settlement amount credited to your
bank account with

SHIPPING FEES
To ensure ease of selling and the best possible customer experience, we mandate delivery to all
customers via our logistics partners and deduct the shipping cost from the selling price before making
a payment to you. Shipping fee is calculated on actual weight or volumetric weight, whichever is
higher.
Volumetric Weight (kg) = Length (cm) X Breadth (cm) X Height (cm)/5000
For eg:
WEIGHT SLAB LOCAL (INTRACITY)

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0.0 Kg - 0.5 Kg ₹44
0.5 Kg - 1.0 Kg ( For every 0.5 kg ) ₹4

WEIGHT SLAB ZONAL (INTRAZONE)

0.0 Kg - 0.5 Kg ₹51
0.5 Kg - 1.0 Kg ( For every 0.5 kg ) ₹19

WEIGHT SLAB NATIONAL (INTERZONE)

0.0 Kg - 0.5 Kg ₹65
0.5 Kg - 1.0 Kg ( For every 0.5 kg ) ₹26

1. Shipping rate for forward shipments is applicable for Bronze Sellers only.
2. There is 20% and 10% discount on the forward shipping fee for Gold and Silver Sellers
respectively.
3. Mentioned rates are exclusive of all taxes.

 Local (Intracity): Item shipped within a city.

 Zonal (Intrazonal): Item shipped within the borders of a zone (North, South, East, West).
 National (Interzone): Item shipped across zones.

COLLECTION FEES
A small payment collection fee is charged to you for all prepaid and post-paid orders that you receive.
The Collection fee will vary depending on the payment type chosen by the customer (Prepaid/Post-
paid). For a prepaid order - Based on Payment gateway, for a post-paid order - Based on cash
collection charges. The collection fee will be calculated on the final selling price of a product. The
final selling price is a sum of the amount paid by the Customer including shipping charges, if any
(Price of product + Shipping charges).

Selling Price
Prepaid Post-paid
0-750 2% ₹15
>750 2% 2%

FIXED FEES

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Fixed Fee is a small amount charged for every successful sale transaction. A successful sale
transaction is an order which has been successfully delivered to the customer and has not been
returned. In case of customer or courier returns, this fee will not be charged. The Fixed fee will vary
based on the order item value irrespective of category and seller tier.

Order Item Value Rate

0-300. ₹13
300-500 ₹11
500-1000 ₹24
>1000. ₹47

FULFILMENT TYPES
Seller Fulfilment: Under seller fulfilment, you are responsible for processing and managing your
orders and inventory. Once you have packed your orders and marked RTD, an E-kart agent will
collect this package and deliver it to the respective customer.

Smart Fulfilment: Smart Fulfilment is a program wherein you get help from Flipkart for
systematically arranging your warehouse, easily maintaining your inventory and getting it smoothly
delivered to your customer via a Flipkart logistics partner. All you have to do is comply with the
smart construct norms to reap the benefits. This construct helps you in boosting the sales, ROI and
reducing the overall cost of doing business.

Flipkart Fulfilment: At Flipkart, we help you have maximum returns with minimum investment.
That’s why the Flipkart Fulfilment service offers you the use of our state-of-the-art fulfilment centres
at very low costs. You store your products in our fulfilment centres where we take utmost care of your
inventory.
For example
Product category- Book in books
Selling price-200
Length=10
Breadth=10
Height=10
Weight=2

Shipping type local

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Selling Price₹200
Commission Fee-₹0
Collection Fee-₹4
Fixed Fee-₹13
Shipping Fee-₹71
GST-₹15.84
How much you make *₹96.16
In similar way if product is dispatch to interzonal or national than GST and shipping fee will increase

MARGIN STRUCTURE
MANUFACTURING MARGIN STRUCTURE
Flipkart has moved a substantial proportion of its manufacturing and sourcing for inhouse brands
from China and Malaysia to India over the past year, helping to cut costs and comply with the
government’s Make in India initiative. That’s helped Flipkart reduce prices of private label products
sold across 300 categories on its platform.
“About two years back, almost 100% of our electronics came from China,” said Adarsh Menon, head
of private label business at Flipkart. “Today, that number would be less than 50%. When we launched
our furniture brand, the entire range was sourced from Malaysia — now that’s down to less than 50%.
Flipkart’s private brands include MarQ, Perfect Homes, Billion and Smart-Buy, which contribute
about 8% to the company’s overall sales, sources said. According to Menon, much of the electronics
and consumer durables, textiles, most high-end Android TVs, air conditioners, washing machines and
smaller appliances are now being sourced from India. As much as 50-60% accessories also get
sourced from India. This comes as the Indian government has Qbeen able to convince global
electronics manufacturers to set up shop in the country

MARKETING MARGIN STRUCTURE

When Flipkart was launched, initially the aim was to sell books before expanding into other product
categories such as consumer electronics, fashion, home essentials & groceries, and lifestyle products.
In March 2017, Flipkart held a 39.5% market share of India’s e-commerce industry. In August 2018,
U.S.-based retail chain Walmart acquired an 81% controlling stake in Flipkart for US $ 16 billion,
valuing it at $20 billion.
Flipkart is India’s answer to Amazon. Flipkart is one of the most visited E-Commerce Websites and
just like Amazon, the company has rapidly become one of India’s original unicorns. The company is
now owned by Walmart and is one of India’s huge success stories.Flipkart’s leading marketing
strategy focuses on every single touchpoint their customers are present at. It uses the majority of its
budget on various digital channels involving both paid and organic marketing. Moreover, since India
has recently experienced digital transformation, the efforts of Flipkart are paying off.Flipkart also
invests intensely in celebrity endorsement and influencer marketing. India is crazy over Bollywood
and Flipkart uses this to raise awareness about their brand and to market their services. Ranbir

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Kapoor, Alia Bhatt, Varun Dhawan and Shraddha Kapoor have all been brand ambassadors who were
predominantly featured in Flipkart’s commercials and digital marketing campaigns.

INVENTORY MARGIN STRUCTURE

Flipkart seller dashboard allows you to view and plan your inventory effectively. Its subsections
provide in-depth information on the present status of the inventory with relevant insights on
improving inventory health.
To begin, log in to your seller account with your username and password. Now, select ‘Inventory
Management’ under the Inventory tab. Next, select the warehouse from the drop-down menu at the
top right corner of your screen. You can now view the datasets for your inventory under the relevant
sections. The stranded inventory consists of products that are in sellable condition but cannot be sold
due to the following reasons:
The seller has tagged the listing as NON-FA: To resolve this, please visit the ‘My Listings’ tab and
change this to FA. The seller has made the listing inactive: You can go to the ‘My Listings’ tab and
change this to active. Please initiate a recall if these are permanently inactive listings. Flipkart has
blocked the listing: Please follow the actions provided by us to make the listings active. Flipkart had
blocked listings that are now ready to be listed: Visit the ‘My Listings’ tab and filter the ‘Ready’
listings. You can now make them active. Flipkart has marked the listings as permanently inactive:
Please initiate a recall for the products. The stranded inventory report will provide you with in-depth
details on the listings.

DISTRIBUTION MARGIN STRUCTURE

Flipkart has their own logistics Ekart. Ekart is the one who delivers the product to you. Pricing and
remote delivery were major reasons for them to start their own logistics.
It is mandatory for the sellers to ship the product only through Ekart.
When a customer places an order, Flipkart will immediately send the details about the order to the
seller and Ekart. Seller packs it with Flipkart packaging material and Ekart picks it up from the seller
and immediately it is sent to the customer.
This process of seller to Ekart and to customer is your delivery time period.
If a customer has delay in delivery, it could be mostly because of sellers. Seller might not have the
product at the time you ordered and the time taken to procure and send it to Ekart is the time delay in
your delivery.
What happens if the customer returns the package?
Now, this is the sad part for sellers. Seller has to wait up to 30 days to receive the product and if there
is no damage, he will be very happy.

To avoid this, Flipkart came up with Flipkart advantage. What it does offer to seller is, they can store
the products in Ekart warehouse and it will be delivered to customer in 24 hours.

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The rates differ between standard seller and Flipkart advantage seller, obviously it is higher for
Flipkart advantage sellers.
The shipping charges also vary across zones in the country.
Ekart is the backbone of Flipkart and it was smart by Flipkart to do that earlier whereas Snapdeal
failed to do so. Now, Snapdeal has acquired Gojavas which is still late to learn on supply chain.

KEY OPERATIONAL METRICS

TO TRACK

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1. WEBSITE TRAFFIC:
Web traffic is the basic metric the online seller must keep an eye on. In the real world, this is
equivalent to the term ‘footfall’, which is commonly applied to brick-and-mortar stores. It is
important to study the web traffic in terms of daily, weekly and monthly site visits, and look for dips
or spikes in the data. This metric gives you a clear and succinct picture of the state of your online
webstore. While your aim should be to drive as much traffic as you can to your online store, this
metric also comes in handy in scaling up or down your server needs. It is also important to have an
idea of the average amount of time the user is spending on the website, and the points of interaction
that the user has with the website.

2. WEBPAGE VISITS:
A typical website is made up of many individual webpages. A typical online retail website has
hundreds and thousands of webpages, if we go by the general rule that every individual product gets
its own webpage. If that is the case, it is not enough to know how many users are landing up on your
website and for how long. It is as important to know where on the website are they spending that time.
Looking at a dataset of webpage visits not only gives you an idea of customer preferences, but also
helps you understand how you can structure your website for more customer retention. By adding the
right hyperlinks on the right webpages, you can divert the incoming traffic to various other parts of
your website. This metric also tells you how your customers interact with individual webpages, and
give you an insight into why certain webpages are more popular than others.

3. ADD-TO-CART RATE:
Add-to-cart rate is perhaps one of the most important KPIs you can glean through your online retail
store. Users on an online retail webstore can broadly fall under two categories – those who buy
something at the end of their visit and those who don’t. The three metrics that we are going to discuss
now are the key ones that differentiate the former from the latter. Adding a product to your shopping
cart shows intent, but the fact remains that 60 to 70 percent of online shoppers do not complete the
transaction after having added products to their cart. This is a wide margin, and one that is potentially
lucrative, because knowing how many customers added products their cart means an opportunity to
push them into completing the sale.

4. CART ABANDONMENT RATE:

Cart abandonment rate is the amount of shopping carts that have been filled and abandoned in a given
time frame. As discussed above, this number generally amounts to around 60 to 70 percent of the
shoppers. Getting to know the cart abandonment rate helps you take a closer look at the checkout
process. Is there a bottleneck in your website checkout design that is impending the flow of successful
transactions? This can be anything from a tedious information form to file before the checkout or even
insufficient support from your payment verifier. It is important to produce a trustworthy image
especially at this stage of the transaction, because the cardinal rule is that if a website looks dubious, it
most probably is.

5. USER-TO-CUSTOMER CONVERSION RATE:

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Finally, this number tells you how many of the total site visits have been converted into successful
sales. This along with the user return rate, tells you about bottlenecks that might exist within the
website. Users generally land up on an online retail website through multiple ways, from Google
searches, advertisements, email newsletters or even clickbait. Knowing where the user is coming from
is an important piece of information because it tells you a lot about the health social media strategies
and the inlets to your website.
The important thing to understand about these and other key performance indicators is that it is
generally not what they represent, but what they don’t, where their importance lies. For example, what
the add to cart rates don’t tell you is the number of users that visited your website but didn’t add
anything to their carts. You would have to deduce them by subtracting the number from the total site
traffic of your website.
Then, you could look at the webpages that these visitors visited and try to find out why they didn’t
add the product to cart, and why they didn’t proceed to checkout. In this way, you can use various
KPIs in tandem with each other to create an image of the user’s experience in real time, and work to
improve it.

DIFFERENTIATION - THE TEAM CAN BRING

(FUTURE ENHANCEMENTS)

1. BRAND RECOGNITION
Tier 2 cities, smaller towns now contribute 66% of e-commerce demand in India. Flipkart has been
very heavily investing into marketing its brand in Tier 2 plus cities because of which it had
tremendous brand recognition.
Flipkart very clearly made its Flipkart plus, membership freely available for students and while the
normal customers have to earn 300 super coins, students could use it right away and get free delivery
and get exclusive flat discount on selected brands. because students are the Chief Technology Officer.
Flipkart is actually combining the loyalty of the decision maker who is going to choose which
electronic instrument to buy and electronic instruments are high margin products. Therefore, both
these factors combined to earn Flipkart loyalty program into.

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2. ARTIFICIAL INTELLIGENCE
Flipkart plans to use artificial intelligence and make online purchase akin to offline buying
experience, Flipkart’s AI project represents a massive effort to improve its marketplace such as
understanding natural languages, making relevant product recommendation and improving search
result.
PROJECT MIRA, an artificial intelligence-focused effort that has been in stealth mode. How easy is
it for buyers to search for what they want? How personalised can recommendations get? Can Flipkart
‘talk’ with shoppers while they are searching for products online? How closely can Flipkart replicate
for its buyers the experience of shopping at a regular store? How well can the backend operations be
streamlined? These are the areas where project Mira would be focusing on.

3.FLIPKART IPO
Walmart-owned ecommerce giant Flipkart will go for an initial public offering (IPO) in November or
December 2022 in US, the company’s group chief executive (CEO) Kalyan Krishnamurthy has
reportedly said. There is also a chance that the Flipkart IPO may be pushed to March 2023 due to
external factors like inappropriate market conditions,
He reportedly added that scaling the grocery business would be a critical part of the journey towards
the public listing. This may be a reason why Flipkart increased its shareholdings in fresh produce
supply chain NinjaCart earlier this week.

4. FLIPKART PLANS TO DEPLOY 25K EVs BY 2030

E-commerce marketplace Flipkart on Wednesday said it will deploy more than 25,000 electric
vehicles in its supply chain by 2030. A day after Amazon India said it has deployed nearly 100
Mahindra Treo Zor three-wheelers, e-commerce marketplace Flipkart said it will deploy more than
25,000 electric vehicles in its supply chain by 2030.
Flipkart said it has already started piloting and deploying two-wheeler and three-wheeler electric
vehicles in multiple locations for delivery across the country, including in Delhi, Bengaluru,
Hyderabad, Kolkata, Guwahati and Pune, to name a few.
Flipkart said its electric fleet will include two-wheeler, three-wheeler, and four-wheeler vehicles
designed and assembled in India, helping boost local innovation and economy. The e-commerce
platform has partnered with leading electric vehicle manufacturers, including Hero Electric, Mahindra

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Electric and Piaggio, for specific vehicles to be deployed for its first and last mile delivery fleet across
the country.

LEARNING FROM GLOBAL MARKET

Here are the five things Flipkart needs to do to ensure it makes the most of the capital
raised:

1. IMPROVE CUSTOMER LOYALTY

Ashish Jhalani, founder of e-commerce research firm eTailing India, feels Flipkart’s chances of
maintaining market leadership will lie in its ability to launch effective customer loyalty programmes.
This is an area where rival Amazon has tasted a lot of success thanks to its all-encompassing model.
With offerings such as Prime Video, original content and faster delivery, the US e-tailing giant has
converted thousands of Indian online shoppers into loyal customers.
Another way to approach the problem is by driving greater consumer stickiness. “Flipkart now has to
ramp up its wallet pay and the focus should move towards high-volume, high-frequency and low-
ticket offerings like food delivery, travel tickets and movie tickets, etc,” says Anup Jain, managing
partner at consumer and retail consulting firm Redback Advisory Services.
Flipkart seems to have taken the first steps towards the exercise. It is mulling expanding to other
segments. It was recently reported that the company was looking to launch financial products and
services online.

2. INVEST IN LOGISTICS
Amazon Prime became an integral part of online shopping in the US mainly because of its promise of
faster delivery. Likewise, Flipkart needs to fasten its logistics wheel, feel experts.
“Flipkart certainly needs to strengthen its delivery logistics network and improve the response time.
They need to build many more distribution centres and have them Flipkart-fulfilled, just like Amazon,

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rather than rely on third-party vendors," says Arvind Singhal, chairman and managing director at
consulting firm Technopak.
Rival Amazon India is doubling storage capacity this year by adding 14 new fulfilment centres.
Earlier this month, it set up its 38th fulfilment centre in Madhya Pradesh and announced that it will
set up an additional three in Hyderabad and the suburbs of Gurgaon and Ahmedabad. That would take
the total number of Amazon's fulfilment centres to 41 by Diwali.

3. GET ON THE FOOD & GROCERY BUS

Amazon has outlined an ambitious growth plan for its retail food and grocery business in India. It
recently secured the government’s nod to invest $500 million in the sector. Homegrown players such
as Grofers and BigBasket, the market leaders in the segment, have also received the government's
approval. Meanwhile, reports have emerged that both Amazon and Alibaba-backed Paytm are looking
to invest in BigBasket.
Flipkart, which shut down its grocery delivery app Nearby last year, will be missing out on a huge
opportunity if it delays getting into the segment.
Jain feels Flipkart should leverage its customer base to establish a strong presence in the grocery
segment, which is a recurring, daily-order business.

4. INVEST IN TECH, TRY NEW BIZ STRATEGIES

Flipkart needs to make significant, holistic investments on its tech infrastructure to improve customer
experience, thinks Singhal. “They should invest much more in technology. Not only in the backend,
but also on the consumer interface front. There are many tech revolutions happening, such as the
concept of virtual trial rooms."
Besides, the very essence of an Internet startup is continuous innovation, a spirit that should also
spread to its business strategy. "It needs to look into various strategies to gain more customers. Many
companies are now offering subscription-based models for beauty and fashion. They need to
experiment on those lines,” he adds.
Jhalani feels Amazon's superlative customer experience, one of the reasons for its stellar run in India,
is something Flipkart just doesn't match up to. And that will be key if it wants to take Amazon head-
on.

5. TARGET TIER II, III CITIES

According to a recent report by research firm RedSeer Consulting, Tier II and below cities will
account for as much as half of all the e-tailing business in the country by 2020.

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This is an area where Flipkart hasn't paid much attention so far. “Flipkart should focus on Tier II and
III centres where growth will be around providing relevant merchandise, like rivals ShopClues and
Snapdeal. It should make the proposition of online shopping more relevant for such customers. Its
strong presence in apparel can be crucial in this strategy,” Jain says.
Gurgaon-based ShopClues, for which small cities are the business' mainstay, had said it witnessed
50% higher demand from Tier II and III cities than Tier I cities during its Diwali Sale last year.

KEY SOURCE OF EFFICIENCY

Key source of efficiency is Competition or Challenges, either a business drown or flourish from the
challenges. In the summer of 2013, the country’s biggest e-commerce player opened its doors to
sellers, allowing them the opportunity to taste success in an online marketplace. However, for sellers,
the online marketplace was uncharted territory.

Consider some of the challenges that the seller faced:

a) Gruesome competition from established brands.
b) Paucity of capital to launch their own stores or brands.
c) Geographic limitations, which limited their reach to customers.

Before the arrival of Flipkart in India, earlier both sellers and buyers had to face so many challenges,
Emerging brands hesitate to enter in the market because of the monopoly of some brands, hence
consumers didn’t have so many options available to them to compare and get the best deal.
Another challenge was the capital required to launch offline stores for new brand, because to be in the
marketplace one need to have a full facility stores available so that the customers get attracted to their
store.
After all this the biggest challenge was to serve the customers globally, every seller wants to take his
product globally and this opportunity was lacking before the e commerce store entered in India. And
because of this buyers couldn’t find the international options available to them easily.

Flipkart foresaw that a growing consumer base meant an increased demand for products,
and a need for variety. The transition from the inventory-based model to the e-commerce
marketplace meant that all three — the customer, the seller and Flipkart — were well
placed to win big.

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 ELEMENT OF INNOVATION
The launch of the Flipkart marketplace witnessed a series of innovations and unique initiatives that
would go on to become best practices as the industry evolved, inspiring and emboldening the
competition as well as new start-ups entering this space.
What followed in the succeeding months since the summer of 2013 was a series of disruptive
initiatives on Flipkart’s part. These included:

 Convincing sellers that it made ‘business sense’ to sell online

 Empowering sellers to meet customer demands around speed of delivery and reliability of
service
 Retaining and rewarding sellers to sell online and consistently improve efficiency
 Flipkart embarked on acquiring sellers in order to offer a broader product selection to
customers. Following were the steps in the process of enlisting sellers:

FLIPKART FIRST REACHED OUT TO SELLERS THROUGH ADS:

A special team connected with the sellers and educated them on online selling. The team addressed
sellers’ concerns regarding on-time payments and safety of personal information.
A pan-India program called ‘Feet On Street’ saw Flipkart partners assist sellers in uploading the
required documents, coordinating with cataloging partners, and helping them list their products on the
marketplace. They focused on Tier I cities such as Mumbai, Bengaluru and Kolkata.
Flipkart touched 2,400 specialized manufacturing clusters of India, which had not yet made a
transition to the e-commerce marketplace. This program was piloted in three key hubs — Tirupur for
apparel, Ludhiana for lifestyle products, and Jodhpur for furniture.

PROVIDED PROFESSIONAL SERVICES:

a) Cataloguing -
Following this initiative, which was led by former head of marketplace Ankit Nagori, Flipkart earned
the distinction of becoming the first e-commerce company in India to build an ecosystem of
professional services such as cataloguing and packaging partners.
A healthy, updated and data-rich catalogue is key to selling online successfully. Flipkart strove to
create a new ecosystem of cataloguing partners. Today, this network has expanded to encompass over
350 cataloguing partners.

b) Packaging partners -
Packaging complaints and grievances can hurt the NPS (Net Promoter Score), which is a measure of
the loyalty of a firm’s customer relationships. By employing dedicated packaging partners, Flipkart’s
marketplace team effected a sharp decline in such complaints and grievances. This also awakened the
seller community to the value of quality packaging.
Through innovative decision-making, Flipkart built an enthusiastic community of first-generation
online sellers. Now came the time to help their online businesses grow.

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 BIBLIOGRAPHY

 https://iide.co/case-studies/business-model-of-flipkart/

 https://startuptalky.com/big-billion-flipkart-flipkarts-business-model/

 https://www.livemint.com/companies/news/ipo-long-term-strategy-currently-focused-

on-driving-e-commerce-growth-flipkart-1561385185537.html

 https://www.ibef.org/industry/ecommerce.aspx

 https://seller.flipkart.com/slp/pricing

 https://seller.flipkart.com/slp/content/pricing-and-payments

 https://seller.flipkart.com/slp/content/what-makes-flipkart-best-online-marketplace

 https://stories.flipkart.com/flipkart-global/

 https://www.vccircle.com/five-things-flipkart-must-do-to-make-most-of-softbanks-

dollars

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THANK YOU!

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