ecommerce

1. By
Dr. Ayan Paul
Visiting Faculty, IIM Jammu
Flipkart (A): Transitioing to
marketplace model

2. Decision of Flipkart
 Platform of few sellers to market place for many
sellers
 Moving from Inventory model
 Amazon
 Challenge with market place
 Balancing market growth and market share

3. Flipkart in India
 Started as book-seller in 2007
 Introduced COD
 Diversified to music, games and movies in 2010
 Own logistics distribution network
 Hub-and-spoke model built around fulfillment centre
 Offered warranties
 30-day replacement
 Brand building
 Sponsoring IPL
 Acquired fashion site Myntra
 Leading e-commerce with 43% market share
 20 million product in 70 categories

4. Effect of competition
Challenge Response
 Free shipping
 Reduced price
 Increase seller base
from 30,000 to 1,00,000
 Transition to pure
paltform company like
Airbnb
 In marketplace, sellers
would be responsible
for inventory
 Competition between
sellers to make the
price down
 Logistics business
eKart as separate

5. Marketplace Model
 Product strategy
 Infinite product selection
 Launching new brand
 Xiaomi
 Heavy discount and free shipping
 Pure market place for niche categories
 Seller paid Flipkart to advertise
 High margin
 Unbranded product
 Flipkart Advantage: Kept inventory and transport for a fee
 Medium margin

6. Marketplace Model
 Attracting Sellers
 Registered sellers having capability are allowed in
the platform
 Sellers are assisted with data analytics
 Building customer base
 45 million customer in 100 cities in 2015

7. Organization structure
 Commerce platform
 Transaction, offline order fulfillment
 Supply chain
 eKart
 New initiative
 Advertisement (search ads & display ads)
 Marketing and branding consultancy to the sellers
 Investment
 Fashion
 Myntra & In-house fashion

8. Flipkart: Key Differentiator
 Convenience of customers
 Access to niche products
 High Market share
 Focus on Business growth
 Challenge
 Maintain service quality

9. Analysis
 SWOT
 Porter’s five forces

10. Recommendations
 Way to profitability
 Maintaining service quality
 Managing sellers