Flipkart Case Study: The Rise And Downfall Of

Flipkart
Here is one another post popular flipkart case study by CIDM institute. Flipkart Co-
founded by Sachin Bansal and Binny Bansal in October 2007, Flipkart.com paved
the way of e-commerce revolution in India. Both Bansals have worked in Amazon
and had technical expertise as a coder. So, technology had to be the backbone of
this Indian venture. Flipkart started much before the digital Indian government’s
‘Make in India’ and digitisation initiative. With the humble starting as a virtual
bookstore, it is now the country’s largest e-commerce player. It has grown by leaps
and bounds and has its delivery network for smooth and faster delivery. Paytm, OYO
rooms case study and Zomato case studies are also very popular Indian companies
which are taught in Harvard bruises schools.

The Journey of Flipkart: From an online bookstore to the e-commerce giant, it is!
Flipkart case study shows high values and high technical background are the base of
this company. The e-commerce giant was the first to offer an exclusive feature such
as 30-day return guarantee, and Cash on Delivery. It worked well not only for early
adopters but also for the price-sensitive segment. It helped in easing out the
transition of its Indian customers, making the switch from offline to online shopping
smoother and streamlined. From books to exclusive launches with OEMs, this e-
commerce unicorn has its product offering spread across twelve broad categories
such as computers, camera, kitchen appliances, healthcare products, stationery
items, TVs, home theatre, and many more.

Flipkart Online Music Platform Flyte was a Failure

Flipkart had also launched an online music platform, Flyte and shut it down little over a year due to
poor customer traction for a single-track model. The e-commerce giant was started with an
investment of Rupee four lakh only, especially when India’s e-commerce trade and repertoire with
online platform hadn’t been particularly favourable. Books were okay, to begin with, but launching
smartphones, establishing into an expensive domain of equipment and creating a name to reckon
with in a segment- where Indian customers weren’t comfortable to pay money for before receiving a
product- is noteworthy. Flipkart should be credited for establishing trust within the customers for
paying upfront. Maybe starting with books wasa thoughtful approach to launch their dream project.
Books are a more natural way to procure customers, they are accessible segment to breakthrough,
and the prices of books aren’t a significant deterrent. There weren’t streaming platforms like Netflix
or Hotstar available; hence, books enjoyed a vast range of takers. Besides, there isn’t any logistic
issue involved in the transit apart from being a cheap copy. Books can quickly be delivered, there is
no wear and tear, and they are inexpensive.

Flipkart’s Customer Relationships Case Study

Flipkart cashed in on the intellectual property of books and banked on the consignment model of
procuring products on demand. It signed up with two models in Bengaluru, where it is based out of.
The e-commerce would procure a book from any of the dealers; pack it, and courier it to the
customer. The company was receiving over 100 book orders per day and providing country-wide
shipping. The zeal to succeed, extend the customer base and offer excellent services was high
without letting the limited resource come in the way. Since there was no money to hire cutting-edge
CRM or customer support personnel, the founders’ phone numbers were listed on the website. The
idea was to focus on customer services, and customer satisfaction so that when the company
expands, it has their trust and base. The user experience and technology have always been core
expertise of Flipkart. The website loads faster and is mobile-optimised and offers hassle-free user
experience. The e-commerce website now has an app too, which is light, and easy to browse as well.
Flipkart started early and had the head star when there were no competitors, and they could grow
unabashedly. They had room to grow, make mistakes and learn from them without virtue signalling.

Flipkarts Opens Its Warehouse

With time, Flipkart opened warehouses in Bengaluru, Delhi, Mumbai and Kolkata and went on to
work with more than five hundred suppliers. The e-commerce giant handles more than eighty per
cent order through its warehouse, which is centrally managed and governed for quality services. In
the e-commerce domain, Flipkart competes with the international conglomerate Amazon and
Snapdeal at the home turf. It acquired Myntra and Jabong, once the leading names in apparel and
established itself right there in the centre. The e-commerce giant has pursued the expansion
strategy with such enthusiasm that it took Amazon by the horn in the smartphone segment. Flipkart
also owns (acquired) a UPI or Unified Payments Interface-based mobile payment-slash- digital wallet
service called PhonePe.

Case study on Flipkart Became Indian E commerce Giant

The e-commerce giant was valued at $20 billion by the U.S. based retail chain, Walmart, which
acquired seventy-seven per cent controlling stake in the company.

Even during its online book store days, it acquired Lulu.com’s Bengaluru-based book discovery
service called weRead. It aggressively expanded itself into the domain of digital distribution with its
acquisition of Bollywood news site Chakpak and Mime360.com

It also took over a fledgeling online electronics retailer, Letsbuy and a Delhi-based mobile marketing
automation startup called Appiterate to boost its mobile services. Myntra still operates as a
standalone e-commerce market, focused on offering fashion and home decor at pocket-friendly
prices.

Flipkart also initiated a new trend in the Indian e-commerce segment by partnering with OEMs and
offering exclusive flagship to its customers. In the year 2014, it set the wheel in the motion of such
many more collaboration with its first partnership with Motorola Mobility. It launched Moto G and
Moto E – budget-friendly Android segment. Since the smartphones were affordable, it generated
colossal traction and caused the website to crash twice. The company subsequently tied up with
Chinese OEM Xiaomi for its Xiaomi Mi3, Redmi 1S and Redmi Note as well as Micromax’s Yu Yunique.
The smartphones’ online release saw unprecedented sales with more than 10,000 units being sold in
a few second of their launch!
Flipkart has several in-house brands such as Citron, Smartbuy, Billion and MarQ. Billion proved to be
a damp squib and couldn’t take off. MarQ ran into branding controversy with Marc Enterprises. The
company also launched a 55-inch Android smart TV 4K that went as quickly as it came.

Flipkart Milestones (Or not) achieved through the years

Year 2012

Case study on Flipkart shows they had tough-times. The Enforcement Directorate raided Flipkart
offices and seized documents and computer hard drives to look into the alleged violations of FDI
regulations.

Year 2014

The Regulatory Authority found Flipkart to be in violation of the FEMA. Several competitors,
including Future Group of Big Bazaar fame, aren’t particularly happy with the discounts policy of
online retailers. This is why it filed a complaint with the Ministry of Commerce and Industry, GOI for
predatory pricing and urged to regulate online marketplaces for a symbiotic existence. This case
study on Flipkart showing various attributes about how a company face legal issues and then come
out of it with implementing proper business ethics with customers.

Year 2015-2017

While making Flipkart case study, its found that year 2015 to year 2017 was full of uncertainties and
dramatically changes in Indian eCommerce industry. 2015-2017 was a year of unprecedented
growth for Flipkart. The company expanded ruthlessly and acquired startups and small companies
left, right and centre to fuel its growth. It also acquired a small stake in MapmyIndia to improve
delivery and logistics. In 2017, the company made a significant US$2 million investment in a
parenting information startup named Tinystep. Later this year, eBay sold its Indian subsidiary to
Flipkart and made a cash investment of whopping US$500 million! The company planned to cash in
on the vast network of international vendors, but eventually, this partnership proved to be a damp
squib.

The primary rival company, Snapdeal also refused its acquisition offer valued at US$ 700-800, for a
more lucrative offer of at least US$1 billion, which didn’t prove to be fruitful for the former.
Snapdeal never could recover from the blow of its losses.

Year 2017 – A Successful Year For Flipkart

This year Flipkart left Amazon India behind and grabbed a significant fifty-one per cent share in the
smartphone segment. It sold 1.3 million phones in just the first twenty hours on September 21,
2017, on Big Billion Day as compared to 2.5 million phones in five days in the year 2016. It also
shows the adoption of users towards online shopping vis-à-vis.
In the year 2017, the e-commerce giant had more than 40 per cent share of the Indian e-commerce
market. Its presence is also bolstered by its aggressive merger and acquisition policy.

Year 2018 – Money Came but Company Gone

This case study on flipkart turned its gear in the year 2018, now company gets the money it was
looking for and find time to exit by giving challenges to some other shoulders.

Global retail giant, Walmart won a bidding war against Amazon and paid US$16 billion to buy a
majority stake in Flipkart. This acquisition was the world’s largest e-commerce takeover. Walmart’s
shares tanked badly on the New York Stock Exchange fearing the former’s acquisition of a loss-
making entity. Sachin Bansal also left the company soon after the acquisition. Now, the Flipkart
employees, including the top management report to CEO of Walmart e-commerce US, Marc Lore.

This acquisition was hailed by the Walmart President, Dough McMillon, who was delighted to
partner with a company trailblazing the path of digital transformation in a growing market like India.
However, Indian traders, mom and pop stores in India felt threatened by this acquisition and termed
it as a threat to the domestic business. Following this deal, Walmart stated that the minority
stakeholders in Flipkart could be presented with an opportunity of a public offering. This
announcement prompted eBay to sell its stake worth US$1.1 billion. Softbank too sold nearly twenty
per cent stake in Flipkart to Walmart.

On August 18, 2018, the acquisition finally saw the light of the day. Walmart also provided equity
funding worth US$2 billion to Flipkart.

Shortly after, on November 13, 2018, in a big jolt to the e-commerce system, the other co-founder,
Binny Bansal, resigned over charges of grave personal misconduct of sexual harassment. While Binny
vehemently denies the allegations, the independent investigation also didn’t find any evidence to
corroborate the charges. However, Walmart maintains that several lapses in judgment were found
on Binny’s part, including a lack of transparency to deal with the situation at hand.

Year 2019 – A new start

Flipkart case study has taken many turns and in 2019, the startup and the U.S.based Authentic
Brands came together to license and manage Nautica stores in India.

The company also invested $4 million in a reward platform, EasyRewardz to boost customer
engagement. The year 2019 also saw the launch of Flipkart Video, a direct face-off in the direction of
Amazon Prime Video. The initial content is sourced from the streaming platforms like Voot, TVF and
Viu. Much like Zomato, it also started streaming original content as Flipkart Video Originals.

Year 2020 – pandemic outbreak

Major e-retailers like Flipkart and Amazon halted their operations and services on March 25, 2020,in
the wake of coronavirus pandemic outbreak. Later, Flipkart partnered with Uber India to deliver
everyday essential items in metro cities like Mumbai, Delhi and Bengaluru amidst COVID-19 national
lockdown. This partnership enabled hundred and thousands of India to stay at home and support in
breaking the chain.

SachinBansal, the co-founder of Flipkart, said it a long ago what the world leaders realise now.

“IT WOULD BE A MISTAKE IF THE INTERNET AND TECHNOLOGY AREN’T CONSIDERED AS A STRATEGIC
SECTOR AND WE KEEP ON DEPENDING ON CHINA TO BUILD THAT FOR US…WE HAVE THE
CAPABILITY AND WE HAVE THE KNOW-HOW TO DO THIS IN INDIA TO MAKE IT HAPPEN FOR US.”

Operation and Flipkart Business Structure Case Study

Flipkart works through a complex business model enabled by several business entities based out of
India and Singapore. In the wake of new FDI rules to reduce dependency on one vendor, the
company stopped selling via its in-house vendor, WS Retail. Later, to reduce its operational
expenses, it was sold to a syndicate of investors.

What are Funding Source of Flipkart?

Case study on flipkart funding source is very exciting, its very hard to see such success and digest it
with ease. Flipkart raised money from investment partners in several rounds. Here’s the year-wise
roundup.

2009

While the co-founders spent mere Rupee four lakhs on setting up the website, it went on toraise
US$1 million in the year 2009 from Accel India.

2010-2011

In the year 2010 and 2011, it raised US$ 10 million and US$ 20 million respectively from Tiger Global.

2012
Flipkart also raised its final round of funding worth US$150 million from Naspers Group and ICONIQ
Capital in 2012. It also raised an additional round of financing of US$200 from its consortium of
investors-Accel Partners, Iconiq Capital, Tiger Global and Naspers.

2013

Morgan Stanley Wealth Management, Dragoneer Investment Group, Sofina SA, Vulcan Inc. also
raised a US$ 160 million for the company.

2014 Yuri Milner’s DST Global as well asthe existing investors such as Naspers, Iconiq Capital and
Tiger Global, raised US$210 million for the company. The speculations were rife that the company is
looking for the U.S. listing in 2016 and is striving to build funding for at least US$500 million before
that. Later this year, the e-com retailer went on to raise US$1 billion for Tiger Global, Accel Partners,
Morgan Stanley and a Singapore-based fund GIC.

Case Study on How Flipkart Valuation Increases?

Flipkart managed to increase its valuation up to $11 billion as it raised $700 million in December
2014. This case study shows us how to take the business using investment and how can we further
valuate our company to make it bigger.

Later this year, the e-com retailer filed with Singapore-based ACRA to become a public company.
Once its funding capital reached $700 million, its number of investors exceeded and it went on to
add new investors such as Steadview Capital, Qatar Investment Authority, Greenoaks Capital, T.
Rowe Price Associates and Baillie Gifford.

2015

Flipkart continued to acquire considerable funding (US$550 million) from its investors and managed
to raise its valuation to $15 billion. In August, it had raised nearly $3 billion from sixteen investors in
twelve rounds of funding.

2017

Flipkart raised its valuation to US$11.6 billion with another funding of US$1.4 billion from Microsoft,
Tencent and eBay. Softbank Vision Fund also invested US$2.5 billion in the company during this year.
2018

In September, Flipkart’s Singapore entity put ₹3,463 crores into its Indian Flipkart for regulatory
formalities.

Digital Marketing Case Study on Flipkart

Like Paytm, Flipkart realised that social media platforms are best utilised as humanely as possible. It
has used its Twitter account to promote products, organise contests and generate some organic
traffic. However, like any other brand, the e-com retailer went through retractions, witty wars of
words and apologies. Flipkart won several awards in gold category at SAMMIE 2018 for creating a
seamless brand experience across social media platform, making the best use of it to generate leads,
revenues and for launching a product. Case study shows that flipkart must have hired the best digital
marketing company who helped it for a successful business plan.

Flipkart ‘You’s Feed’

Every brand launches an annual sale, but Flipkart took hyper-personalisation a step ahead with a
personalised customer feed called You’s Feed. This customer-oriented, algorithm-based and
automated feed is user-based platform advertising, bringing you products that you might have
referred to or has shown interest at some point. Its case study shows us various ways to look from
the perspective of customers for a successful business relationships.

Moreover, Flipkart’s 360-degree view into ‘Look what Flipkart Delivered’ Storify page is an
illustrative example of how to keep customers happy and how to flaunt it! It is also one of the very
few brands that made use of even Google Plus while it lasted.