Flipkart WiRED 2019 | Campus Case Challenge

[Campus Round]

About Flipkart
Flipkart, which started operations in 2007 by selling books, is today the largest e-commerce player in
India — with approximately 200 million subscribers operating across 80+ major categories. With the
internet base expanding in India, Flipkart is eyeing this opportunity to come up with many new
initiatives to ensure top-of-the-mind brand recall for online shoppers. Customer First is one of the core
values at Flipkart since inception and here are some of the initiatives that the company has
experimented with to increase customer engagement and mindshare​:

2010 Cash-on-Delivery Service

2011 30 Day Replacement Policy

2012 Fashion & Lifestyle Category Launch

2013 Launched Marketplace & Same Day Delivery

2014 The First ‘Big Billion Day’ Sale

2015 Flipkart Lite - Mobile Focus

2016 No Cost EMI

Private Labels & Expanding Categories

2017 (Large Appliances, Furni-sure, Refurbished business)

2018 Grocery, Shopper Audience Platform (tie-up with Hotstar), Flipkart Plus

2019 Buy Now Pay Later, 2Gud, Supermart, Supercoins, Games, Travels

If you want to know more about the innovations by Flipkart visit

https://stories.flipkart.com/category/innovation/
Problem Statement
Internet in India​ :

By most estimates, 57% of the world population is now on the Internet and on an average spend close to
6 and a half hours online every day. Closer home, 560 Mn Indians are on the internet with
approximately 250 million users in Urban areas (Metro till Tier3 and below).
90% of Indian internet users access the internet on their mobiles and spend 7.5 hours on an average per
day online.
It is not an exaggeration to say that internet penetration in India is set to explode in the next 2 years
with multiple projections pegging this number close to 750 Mn users by 2021. This growth in new users
will change the internet landscape dramatically.
Already, trends are emerging which suggest that most new internet users are going to move towards
consuming entertainment, doing financial transactions and shopping online much quicker than their
predecessors with cheap data, better network speed and connectivity fueling this rapid adoption.

Important facts​ :
● E-commerce constitutes less than 10% of overall retail in India and while so far being largely an
urban phenomenon, it is growing rapidly in tier 3 and below every year.
● Less than 50% of Internet users shop online or do financial transactions, most of them confine
themselves to just messaging, social media or entertainment.
● Entertainment is fast catching up on social media to emerge as the primary category for internet
usage behind messaging in both Urban and Rural India.
● More than 50% new internet users are likely to shop online within the first year, up from less
than 30% earlier.

Flipkart at a crossroads​:

There is massive headroom for growth in each of these categories with the explosion in new users, be it
Shopping, entertainment, payments etc Does this mean that the winner in such a landscape will be the
one who is a one stop destination for all of them or solves one/few of them deeply?

Looking at ecommerce specifically, the next step jump in scale will come from deeper penetration of the
category on both it’s ‘supply side’ and ‘demand side’. On the supply side, this may mean solving for easy
and scalable onboarding of sellers who are today exclusively offline and get the ‘bazaars’ of India online
as well as expanding the supply chain network and ​f​ulfilment centers to reach these new users. This
could potentially mean Flipkart building new capabilities or forging partnerships to strengthen the
foundation for eCommerce 2.0
On the demand side, getting these new users to start shopping may require players to not just be a
shopping destination, they need to cater to their other needs like entertainment, financial services and
hence may require Flipkart to pivot away from just being a shopping destination.

Globally, internet companies have taken different routes to this end. In China, the progression towards
“Super apps” has ensured that customers can find everything they need on a single app. Customers use
apps like WeChat, Meituan Dianping etc for a wide range of activities like entertainment, flight/hotel
bookings, messaging, news, financials services like loans and investments etc

These apps either fully own these different verticals or partner with different players, like JD.com in
Wechat’s case (e-commerce on a messaging app), to provide the required offering. Another example is,
WeChat Pay being offered as part of an ‘ecosystem’ of offerings to other apps, like PinDuoDuo who
integrate it fully in their experience and thus can tap into WeChat’s existing user base to acquire new
customers while WeChat gets the benefit of increased transactions outside the WeChat app.

These “ecosystem” or “hybrid” routes which the Chinese internet companies have taken has resulted in
an accelerated customer base & revenue growth.

In the US, this has played out differently. The big internet companies offer different apps for different
needs but either “fully own” or “control” a part of these apps. For example, Google lets you book
flights(google flights), watch videos (Youtube), do video calling (Duo) via different apps but owns them
completely. Consumers still need to download these apps individually and have a distinct experience on
each of them. Same is the case with Facebook, Instagram and Whatsapp, three distinct apps catering to
almost 3 different needs under the overarching umbrella of allowing people to connect socially.

But there are winds of change in the US. Uber has started food delivery branching out of their existing
ride hailing offering, AirBnB is venturing into ‘experiences’ beyond just accommodations, Instagram is
trying to integrate “shopping” by working closely with brands and influencers and Apple is venturing into
‘content’ and ‘credit’ but what is common amongst all of these examples is that they have chosen to
completely control the experience and hence deliver greater customer satisfaction and thus better
retention of users.

To put it succinctly, while China has taken the “​ecosystem​” route with big internet apps choosing to host
different partners or opening their own services to be used by other partners to unlock scale for all the
players in the ecosystem, US has taken the “​Fully controlled​” route with​ ​each App solving for one
consumer need completely and fully control the customer experience before moving on to something
else.
Flipkart today is at this crucial juncture. An internet pioneer in India looking to chart out its growth
strategy in a rapidly changing consumer landscape.
The questions confronting you today, for the purpose of this case study :

1. Looking at Global case studies, if you had to suggest to us, which route would you recommend
The ‘ecosystem’ route or the ‘fully owned’ or a hybrid of the two.
2. How will the chosen route translate on the demand side? What should Flipkart “be” for the
customers? Should they see Flipkart as a destination for everything they need or should there be
different apps within the Flipkart umbrella for their different needs?
3. Based on the answer to the first question, what should Flipkart do on the “supply” side? Does it
mean venturing into new verticals like OTT, travel tickets/bookings, financial services via
partners or fully owned? What does it mean in the supply chain side, should we work with 3rd
parties like Delhivery to scale reach and fulfilment centers or fully own the network to provide
the best experience to e-commerce customers? Should we scale the seller base by developing
easy onboarding to offer ‘local’, ‘regional’ and widest range of products to our customers or
continue to scale steadily while continuing to strongly guardrail quality?

Key Deliverables
In not more than 5 slides, answer the 3 questions.

● Recommend the right strategy for Flipkart. Bring in the relevant Indian context in your
recommendation. You may use current internet trends in India, global evolution of internet and
primary research to substantiate your view
● Demand side : How does your chosen strategy translate on the demand side? Provide 3-4 key
areas where and how this strategy will be deployed and provide a timeline view of
implementation and key customer metrics that it will move : Daily active users, Monthly active
customers, Repeats etc
● Supply side : Provide 3-4 key areas where and how the chosen strategy will be deployed. Provide
a timeline view of implementation with key supply side metrics it will move : Number of active
sellers/partners, Number of listings/products/hours of content etc
Please put all analysis, data points that have been used to arrive at your final recommendations
in the annexures.

Important Guidelines for the Idea

● Keep context and compatibility of Flipkart in mind while benchmarking best practices with global
companies.
● Implementation timeline should not exceed 1-2 years
● Depth of employee motivation understanding and business depth
● Consumer first and employee champion as the two key pillars to be considered while forming the
strategy
● Feasibility of the solution to be used even with company scaling up in future
AceTheCase
Industry Trends
Fact Sheet India Consumer Internet Market (2017) split by sector
✓ Of the 500 mn online population nearly
50% are using social media platforms while
about 40% use mails and google
✓ Only the 10% of 500 mn online users who
are buying some kind of products online
✓ India’s internet growth is roughly four times
the global rate of 3% over 2016-2020

Drivers of Growth
✓ Telecom majors like Reliance Jio, Vodafone
Idea likely to further help in connecting the
masses to the internet
✓ Rapidly growing access to smartphones
Online Population (mn) from 2017-2020
Key Insights:
✓ Estimated online shoppers of 50 mn is
expected to grow at a CAGR of 28% Note: m-wallet which has a gross transaction value of 13B USD has been excluded
✓Of 50 mn online shoppers, only 20 mn are
monthly active e-tailing users Insights:
✓Growing internet & smartphone penetration ✓ Online mobility expected to grow to encompass a much larger than the
is driving steady growth of e-commerce current 1-2% share of all public transport rides by 2020
users, but India is still underpenetrated in ✓ Etailing is expected to grow on the back of rapid addition of online
comparison to other geographies shoppers with online penetration increasing to 7-8% by 2020
✓E-commerce users ~ 48% of internet users in ✓ Growing internet penetration coupled with increase in average
US and about 22% in China; are just 10% of disposable income will lead to higher travel spending and a steady
the total internet users in India growth for the sector
Industry usage evolution funnel in India

AceTheCase
China Vs United States (Ecosystem Vs Fully Controlled)
Typical look into mobile phone users in China Typical look into mobile phone users in the United States
Consumer Insights - China
WeChat isn’t just another messaging app. It’s necessary to survive.
✓ WeChat provide for an all-encompassing mobile experience Quotes from in-depth Consumer interview
through TaoBao, Mobile Baidu, UCBrowser, YouKu, and some “I have an app or two for reading the news, an app for each
popular livestreaming app, which might capture the most popular of my most used airlines, a few options for ordering food on
apps for an average Chinese consumer. the go (gotta grab those discounts), some company specific
✓ Super app is one with seamless, integrated experience to major
customer loyalty and order ahead of time apps, an app to call
online hubs, bypassing individual company websites and disparate
interfaces
a ride share, and some personal messaging and recreational
✓ Once registered with a credit card or bank account, can use all of apps. When I’m looking to do something that one of my
WeChat’s available financial services as below current apps can’t, I’ll just find something new on the App
• Buy train tickets Store to take care of that” – Sagar Vare, 25 Yr Old, Googler
• Purchase and manage city services: pay for utilities, book a “I don’t have any use for social networks. I connect with
doctor’s appointment, and even pay for traffic fines
those dear to me via Whatsapp. I don’t need Social Media,
• Hail a ride share
• Order takeout
just chatting suffices” – Varun Solomon, 24, Student,
• Get a bike share Graduate School of Business, Stanford
• Book a stay at a hotel

What’s Next
✓ Social x eCommerce:
Facebook with Instagram and Youtube could look to play into the brand aspects of their platforms to provide online stores, loyalty programs, or way to directly showcase and purchase fashion
wardrobes or promoted products. Amazon might look to invest in growing towards a social shopping experience. First, allow a group shopping and ordering to allow people to save on shipping or grab
bulk deals with friends. Then, continue to move into a more social shopping experience to share, gift, and promote things with your circle.
✓ Infrastructure for an increasingly mobile first experience
Right now, these super-connector companies often provide more than a few inconveniences when trying to connect on mobile. Google Maps might ask you to —Would you like to Open the App Store?
— or otherwise open another app, Facebook might direct you straight to the browser, and specifically to that other browser that definitely is not Consumer’s default browser. After another minute of
signing up and signing in, then trying to press the little browser links — consumer would decide to pull out his/her laptop instead.
“I don’t want to have to endlessly download, open, login, insert payment information, and then close apps for once a month activities.”
✓ These super-connectors start investing in infrastructure and APIs to offer small, incremental in-app experiences for one-off things like ordering, menus (Google Maps has this already!), and event ticketing.
From there, they might be able to offer comparable mini-apps as WeChat has successfully experimented with.

AceTheCase
Strategy for Flipkart (House of Brands)
FLIPKART NEW VALUE CHAIN FLIPKART HYBRID APPROACH
Talent + Common R&D Department TEECE Model
Computing Customer
Industrial Catering to customer
Capability Engagement
Blueprint requirement such as
entertainment, Difficult to make Holder of Assets

High
Technology messaging, news and profits Profits
Development ticket booking

Imitability
Potential for
backward 3-D
CE
POC→Pilot Voice of Customer
integration
Highest Bargaining

Low
Innovator Profit s
Power Profits
AI/ML Flipkart’s
Industry Specific Distribution
Distribution &
Suppliers
Data Lake AI/ML Platform
Models Customer
Customer
Platform hybrid model &Sales
Sales

Freely Available Tightly Held

Complementary Assets
Supply of Information; Integration of Back Hybrid model proposed with Flipkart, Myntra, Hybrid approach recommended:
Data Lake; Traditional end-platforms to PhonePe acting as a house of brands for 1) Backward integration into suppliers and
e-commerce suppliers, support multiple customer facing interactions. Flipkart to leverage technology management across platforms
banks, media content applications strong brand names over next 1-2 years 2) Leveraging business synergies between the
platforms under a common house of brands
Leverage Flipkart’s strong culture of developing organic brands through product innovation 3) Listening to the Customer voice about
Flipkart needs to both forward and backward integrate its existing value chain. It need to forward multiple Apps versus super-app
integrate into last-mile delivery systems (E-kart) and customer experience centers for offline retails. 4) Insights from the un-bundling of Super Apps
Backward integration into data centric repository, B2B suppliers (eg: Udaan) such as Alibaba(Taobao) and Yahoo! in past

AceTheCase
The Pull (Demand)
Flipkart reimagined (House of Brands): Flipkart to follow the Hybrid Approach, with focus on building on existing brands and
strengthening the value offering of each of these Apps by building a “pseudo” Super-App which are inter-connected with a
One-Touch Feature(to guide customer to the relevant App) to enable seamless customer interaction across platforms

Flipkart to be the parent brand with Social Myntra to be an all exclusive premium and In addition to seamless online banking, act as
Media, Chat, OTT and Ticketing integration ultra-premium Apparels and Lifestyle store third-party services & govt. services(1 touch)

• Cross-selling: • Seamless user experience : • Interactive Applications: • Simplified Payments :

Idea:
Cross selling of products and
services being offered between
various Master Brand apps to
ensure that the customer stays
active on Flipkart related Apps
Cross Listing of Products: 2
Timeline Months
One-click feature to navigate
from one App to another App.
One touch integration within
Flipkart for OTT, Chat and Social
Media services
Developing one touch navigation
between Apps: 6 months
In-order to increase the PhonePe to offer Credit-Card
customer engagement and
drive up the average time spent payment, wealth management, gift
on Flipkart and related hampers and gifting voucher and
platforms, in-built features like integration to third party Apps such
OTT, music and video streaming as Cabs, Food Delivery & News
should be given priority Subscription
Development of In-house chat Bringing more 3rd Party Apps
feature: 6 months Online: 9 Months

Realizing benefits from Integration of Chat, OTT and Development of OTT one One touch payment form
synergy: 1 Year Social Media Services: 1 Year touch navigation: 6 months PhonePe: 1 Year
• Number of Users leveraging • Number of one-clicks on in- • Average time customers • Number of customer
cross-selling between Apps spend on Flipkart main App transactions using PhonePe
Key Metrics
• Daily active users across • Number of repeat one- • Average usage of features • Number of customers using
main platforms clicks on single page
explored (eg: Chat) per user PhonePe for 3rd Party payments

AceTheCase
The Push (Seller)
New Verticals (All fully owned by Flipkart under House of Brands)
Key Synergies driving strategy:
• Current supplier contacts
and strong relationships built
• Data-centric new businesses
– OTT, Ticketing platform
Social Media Chat OTT (for Flipkart Ticketing (with Third-Party Eg: Cabs (with Public Services Eg:
• Cutting Edge R&D Team (through Flipkart) Brand Members) Flipkart & PhonePe) Flipkart & PhonePe) Electricity Bills (with
Flipkart via PhonePe)

Idea: • Demand Aggregation:
Master brand will act as the
demand aggregator across
platforms such as Flipkart,
Myntra, Jabong and categories
such as fashion & apparels,
electronics
• Leveraging R&D :
SWOT analysis indicates strong
R&D team working on cutting
edge technology. By building
AI/ML platforms for future
applications, Flipkart can
leverage the data lake developed
• Building Data Lake : • Backward integration:
Flipkart needs to build a
Easy on-boarding of sellers
master repository of customer
information such as through a common touch-
point platform across
preferences, demographics,
cohorts for precision marketing categories and geographies.

• • Integration of customer • Developing one touch link: 6-8

• Supplier integration: 1 Year
Timeline
• Realizing benefits
synergy: 2 Years
Alignment of R&D towards
new project: 6 months
from • Prototype to Proof of
Concept to Launch: 1 Year
Months
database: 2 months
• Forming cohorts for precision • Deploying platform for
marketing: 2 months common on-boarding: 1 Year

• Number of active sellers on the • Number of AI/ML Platform • Number of unique seller • Number of sellers across
platforms – daily and monthy Algorithms Developed user cases developed multiple platforms
Key Metrics
• Number of listings/products • Number of breakthrough • Credit-worthiness of sellers • Number of repeat listings and
across platforms (to provide small loans)
projects undertaken products across platforms

AceTheCase
Appendix : Industry Trends (Contd.)
Growing Internet & smartphone
penetration has driven a steady growth in
e-commerce users
But India is still considerably
underpenetrated compared to other
Online Penetration across sectors
countries

E-tailing monthly shoppers in India (20 Mn) are comparable with 160 Mn shoppers of china and 140
Mn Shoppers for USA.

Key Insights:
✓ The Indian ecommerce has seen a steady growth over the years from 2014 and is
currently pegged at $53 bn. Growth of 25% is expected to continue and the Indian
ecommerce industry would cross $100 bn marker by 2020
✓ The $53 bn is split up between the larger and smaller sectors.
✓ E-tailing dominated by the giants Flipkart and Amazon is pegged at $ 18bn
✓ e-tailing industry is expected to grow due to the rapid addition of online shoppers with
online penetration increasing to 7-8%.
✓ Online cabs, on the other hand, is currently pegged at $2.1 bn and we expect this to grow
much larger as currently, it is just 1-2% of the overall public transportation rides in India
✓ Then there are these bunch of smaller sectors like online food delivery, e-pharmacy,
groceries etc. which are currently less than $1 bn but have huge headroom for growth
✓ Category 1 – Proven Value : Sectors which have grown to a good market size with decent online
penetration, have OTAs, online ticketing, online food delivery and online cabs in this category.
✓ Category 2 – Large Potential : Sectors which have grown to a good market size but have very low online
penetration, hence huge growth is expected with growing online population. This category comprises
online groceries, online fashion, and e-tailing.
✓ Category 3 – Emerging : New upcoming sectors which have low market size very low online penetration,
hence growing at a much faster rate than the other sectors. Hyperlocal and online medicine delivery are
key sectors in this category
✓ Category 4 – Organic : Sectors which have gained good online penetration and have achieved a good
market size, hence further growth in these can happen only organically. Online matrimonial and online
real estate classifieds in this category

AceTheCase
Appendix: SuperApp – Analysis & Drawbacks
Replication of SuperApp by Global Technologies
✓ Rise of China as a technology and innovation superpower, with companies like WeChat
and ByteDance leading the way with new concepts like ‘super app’ and ‘Social+’ (latter
referring to group buying and live video in ecommerce)
✓ Touting China’s influence, companies outside of China have increasingly adopted these
new concepts. In Southeast Asia, Grab and Gojek now also happily consider
themselves ‘super apps’
✓ In the US, Amazon has launched Amazon Live, its own version of live streaming, while
Facebook came up with Lasso, a short video app inspired by ByteDance’s TikTok
✓ Global Technologies are now replicating successful concepts from their Chinese
counterparts, from the super App to Social+ ecommerce to short video
Drawback of Super App
✓ Numerous reason why portals like Yahoo and AOL eventually got unbundled into vertical media, the same
reason why that famous Craigslist unbundling chart exists
✓ Difficult to try to do so many things and still be able to provide the best and consistent user experience across
all products and services. Very same reason big companies grow, get bloated, and eventually lose (parts of
their business) to startups
✓ Alibaba’s Taobao was the original ecommerce super app, yet it had to unbundle itself by splitting out Tmall
from Taobao so the latter could focus on a more premium audience.
✓ In the last few years both Taobao and Tmall have lost ground to the likes of Xiaohongshu (premium, female
users) and Pinduoduo (lower-end, bargain hunter users). The latter two upstarts were able to win by focusing
on doing a few targeted things very well.
Super-apps vs Super-Connectors
✓ In the US, the internet world had already led rise to heavy competition between Facebook, Myspace, and a newly
rising Twitter. Google had already taken up the search space and online news sites for each media outlet were
gaining traction.
✓ Separate internet bubbles had already formed in the eyes of the US internet consumer. Competition just to
dominate in one space was incredibly tight, and companies focused their best efforts to succeed where they had
captured one area of customers’ attention.
✓ By the time Google, Facebook, Apple etc. had accumulated enough cash and runway to be secure in search and
ads, social media, and consumer electronics respectively, there were already other companies blazing the way for
the share economy, music, bike sharing, health, finances, and all else. For these tech giants to then try to create a
viable competitor, they either had attempts for acquisition (Instagram, Oculus, Youtube, Waze, etc.), or Google+.
✓ Not everything is bigger in America, but that doesn’t mean that the app experiences of the West aren’t big.
Facebook by way of Messenger allows you to send money to that friend that you always lose NBA playoff bets to.
✓ Now from Facebook events and pages, you can go straight to Ticketmaster to purchase tickets for Radiohead’s new
tour or navigate to OpenTable to reserve a seat for a special night for two.
✓ Facebook is investing in Oculus, as VR is one of their big bets for the future of social platforms. OAuth has enabled
both Google and Facebook to power login services almost universally.
✓ Amazon is partnering up with studios and producing original TV series to add to their entertainment offerings.
Whole Foods is now a part of Amazon and their Prime/Now delivery offerings.
✓ Within the individual app culture, what we see is rather than super-apps, they have super-connectors.
AceTheCase
Appendix: Porter Forces
Bargaining power : Supplier
• For suppliers, ecommerce is another
platform to sell their products. Hence
ecommerce companies have some
amount of bargaining power
• Except in case of popular products,
company has lot of alternatives. They
have low switching cost, if there is no
contract
• Not all suppliers might have the ability or
willingness to forward integrate
• Price discrimination is possible
• As flipkart is an inventory based business
model they buy in bulk from the suppliers
• Treating suppliers as partners would be
beneficial for the both sides
Threat of entry
• Industry condition: very high potential but it is at its nascent stage and Lot of
scope for growth
• Entry of many small players to explore the niche areas
• High capital investment is required. Wouldn’t be a deterrent as VC/PE
interested in investing
• Flipkart already established its brand name & network. Hence not affected by Bargaining power Buyer
entry of new entrants • To attract buyers to new mode of
• Flipkart is ahead in their learning curve while others are learning purchase, various methods (e.g COD) are
tried to make process easier
Intensity of Rivalry • Buyer takes time to trust the company
• Flipkart is not only competing against their • Price information is easily available
competitors in ecommerce but also against without direct interaction. Hence, no
traditional retail stores price discrimination is possible.
• Flipkart has less competitors of same size but • As the customers are end users of the
many in smaller size product, there is no threat of backward
• Incentive to fight is low, as the market is big for integration
everyone to grow’ • Large no of competitors vying for buyer's
• High Exit cost: As flipkart has inventory-based attention which might say that bargaining
business model, exit cost is very high power is in buyers' hand. However the
market size and other growth options
makes it level playing field
Threat of Substitutes • Products are not differentiated. Hence
• Emergence of M-commerce, which would make the purchase process more buyers can easily switch from one player
convenient to another
• Traditional retail stores which is trusted by customers (as they prefer
transacting in person) over the ecommerce companies
• There is no switching cost for the buyers to move from one company to other.
For similar reason, cross price elasticity is high
AceTheCase
Appendix: SWOT Analysis
STRENGTH
✓ India’s Largest E-commerce Retailer: Flipkart is the India’s largest E-commerce company & had sold GMV
(gross merchandising value) of $1 billion till now. WEAKNESS
✓ Experienced founders: The Founders of Flipkart, Sachin & Binny bansal are Ex-Amazon employees. Having
prior experience in the E-commerce industry helped the founders to work strategically ✓ Limited Distribution channel reach: Although its logistics arm has kept cost’s low, the reach has been affected
and differentiate their business in a highly competitive market. which is a weakness for Flipkart. Due to use of outsourcing, Global giants like Amazon & eBay can deliver
✓ Acquisition: With its series of acquisitions like Letsbuy.co,, chakpak.com, weread.com, Mine360 & the the product anywhere in the country. However, Flipkart is still struggling in this field.
recent one Myntra in 2014 has helped the company to expand in the E-commerce space & used the ✓ Cost of Acquisition: Due to stiff competition in the market & low customer retention, the cost of Acquisition
capabilities and existing resources of acquired companies. is high because Flipkart acquires a lot of customers through online advertising. As per Flipkart data, the
✓ High Brand recall: Flipkart has established itself as a renowned E-commerce company in India through TV company spends R.s 400/- on acquiring a new customer on an average.
ads, online branding and through its presence on social media. Brand activities like the “Big billion day” ✓ Power in the hand of buyers: Since this industry is flooded with many players, buyers have a lot of options to
have really increased the brand recall of the company. choose. Switching costs are also less for customers since they can easily switch a service from one online
✓ Own Payment gateway & Logistic arm: Having its own Logistics arm E-kart & payment gateway Payzippy retail company to another. Same products will be displayed in several online retail websites. Product
has helped the company to control its Expenses. Thereby passing the benefits to the end customers. differentiation is almost absent and the fight then begins on the basis of price only.
✓ Exclusive & broad range of products: From having Exclusive rights to launch some products like MotoG
MotoX, Xiaomi Mi3 as well as personal designers' segments in garments category, has helped the
company to differentiate and localize its offerings.
✓ R&D team: Flipkart has a very strong R&D team

OPPORTUNITY THREATS
✓ Expansion of business: By targeting other emerging markets company can increase their revenues as well
✓ Competition: Stiff competition from the global players like Amazon, eBay as well as local player like Snapdeal,
as it can have Economies of scale.
Tolexo and Shop clues who are continuously trying to eat each other’s market share.
✓ Expanding their Product categories: This will increase their customer base & at the same time will reduce
✓ Government regulations on the issues related to FDI in multi branding retail has been a big hurdle in the
the cost of acquisition and customer switch.
success of the E-commerce industry in India.
✓ Changing mentality of Indian customers: With increasing numbers of customers getting comfortable with
✓ Indian consumers are not yet comfortable with concept of online payment
online shopping & increase in numbers of Internet users in India, there is huge potential in this Industry.
✓ Early starters in M commerce field can poach the customers
✓ Supply chain: By optimizing their supply chain they can compete with the other players & can manage the
✓ 100% FDI in B2B internet market and the pressure on govt. by Amazon for similar steps in B2C internet
loosing sales on account of not making the product available due to delivery constraints.
market
✓ Establishing in other developing economies: Like Amazon, Flipkart can slowly start expanding out of India
✓ Entry of Google in online e-books and movies market
and establish operations in other countries as well which will help improve revenues.
✓ Competitors capturing alternative market through innovative strategy (Build a Bazaar by infibeam)

AceTheCase
AceTheCase