1. Flipkart
A study of the e-commerce industry
Group V
Aritra Ganguly
Piyush Srivastava
Rahul Bansal
Rajat Sood
Sonal Rawat
Gaurav Jain

2. Vision
To become
‘Amazon’ of India
Mission
Providing a delightful
customer experience
Customer
Obsession
Communication
& Ownership
Innovation
Honesty &
Selflessness

3. 5.4 7 16.5 18.4 22 27 32 45 51 60 90 123 155
213
302
350
438
547
684
854
1,068
1,042
1,059
1,076
1,093
1,110
1,127
1,143
1,159
1,174
1,190
1,205
1,221
1,236
1,253
1,270
1,286
1,303
1,322
1,342
1,362
1,383
Internet usage (in millions) population (in millions)
Effect of Internet base & stable population

4. Impact of Smartphone market
growth and internet rates
Smart
phone
market,
155
other
phone
users, 18
89.5% of mobile internet users are accessing
the net through smartphones
-> internet on the go, from anywhere, anytime.
15 Aug 1995 – Internet started in India
2004 – 256 kbps speed
2007 – ‘Year of Broadband’
2010 – 3G
2014 – 41% of ecommerce
purchases are through
mobile phones

5. 3.80 4.40
5.94
8.02
12.60 13.60
16.00
20.00
25.00
31.25
39.06
48.83
2009 2010 2011 2012 2013 2014 2015 2016 ( E ) 2017 ( E ) 2018 ( E ) 2019 ( E ) 2020 ( E )
e-commerce industry in India
e-commerce
In $ billion

6. Industry forces
Threat of
new
Entrants
Bargaining
Power of
Buyers
Substitutes
Bargaining
Power of
Suppliers
Low
Many providers
for same
product, with
nearly zero
switching costs
for customer
High
Plethora of options
for the buyer has
led to a culture of
comparing before
buying
High
Extremely low BTE; only need
a domain name and tie ups
with suppliers
• Govt is contemplating FDI in
online retail too.
• Industry is booming
• Delivery sites for physical stores
is a new challenge
Low
Competing with brick & mortar
stores, most of which cannot
match prices or delivery
• Only certain product
categories like personal
care or perishables might
be preferred at offline
stores

7. Profit Pools for E-Commerce industry
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Telecom
services
Telecom
Equipments
PC
Accessories
peripheral
industry
Packaging
Industry
Couriers
2013 Market
Revenue(Crores)
2013 Operating Profit(
Crores)
-20%
0%
20%
40%
60%
80%
100%
Telecom
services
Telecom
Equipments
PC
Accessories
peripheral
industry
Packaging
Industry
Couriers
2014 Market
Revenue(Crores)
2014 Operating Profit(
Crores)

8. Buying pattern on different
shopping channels
https://www.pwc.in/assets/pdfs/publications/2015/retailers-and-the-age-disruption.pdf

9. Reason for Buying online
https://www.pwc.in/assets/pdfs/publications/2015/retailers-and-the-age-disruption.pdf

10. Delivery Channels Options
https://www.pwc.in/assets/pdfs/publications/2015/retailers-and-the-age-disruption.pdf
•Internal Delivery/logistics channel
like eKart, Amazon
•Third party delivery channels like
Courier services (DTDC, BlueDart)
•Use of Indian Post Services

11. E-Commerce site Traffic Source
Flipkart
Google India 28.6%
Google.com 10.3%
Amazon India
Google India 19.6%
Google.com 9.6%
Snapdeal
Google India 20.3%
Flipkart 10.4%
Jabong
Google India 13.7%
vcommission 13.0%
Daily Pageviews
Pageload time
13.9
3.36
12.9
2.29
6.6
3.40
3.2
2.19
Flipkart Amazon India Snapdeal Jabong
Flipkart,
$1.30
Amazon
India, $1.20
Snapdeal,
$0.59
Jabong,
$0.29 Monthly revenue
(in $ millions)

12. How are they surviving?

13. http://www.livemint.com/Companies/VXr8oJzNJ4daOYSO5wNETN/Inside-Flipkarts-complex-structure.html

14. Flipkart Pvt Ltd
Flipkart
Marketplace Pvt.
Ltd
Flipkart India
Pvt. Ltd
Flipkart Internet
Pvt. Ltd
Flipkart.com
Digital Media Pvt.
Ltd
Digital
Management
Services Pvt. Ltd
Flipkart Logistics
Pvt. Ltd
Flipkart
Payments Pvt.
Ltd
Flipkart Payment
Gateway
Services Pvt. Ltd

15. Elements of Strategy
Arena
 Product categories
 Started with Books, then music and mobiles and now Home
Category. Around 70+ categories with 30mn products
 Channel
 Web-based & Mobile App - 70-75% of our total traffic is already
coming from our mobile app
 Also Opened “Experience Zones”
 Value Creation
 COD with 30 day replacement

16. Vehicle
• Acquisitions
• Mime360, a unit of Mallers Inc. - exchange platform connecting content owners with
content publishers.
• Letsbuy.com (2010)
• WeRead (2010) - social book discovery tool
• Fashion Brand Myntra to get foothold in fashion category
• Flipkart plans to invest in or acquire more than 15 start-ups
• AdIQuity Technologies Pvt. Ltd - mobile advertising firm
• DSYN Technologies – DSYN has a product called Appiterate that helps clients increase
downloads of their mobile apps and drive higher spending on apps by targeting users
more efficiently.
• Stake in the marketplace and auctions startup WeHive Technologies Pvt. Ltd. This
acquisition will help Flipkart increase its market dominance by scouting for mobile-
focused companies.
• Invested in payment gateway and mobile marketplace ngpay and Jeeves Consumer
Services Pvt. Ltd, which provides after-sales services on large home appliances and
electronics.
• Marketplace Model
• 3000 sellers till 2013 expected to grow to 100,000 by 2015 year end.
• Alliances
• Exclusive tie-up with Mobile companies like Xiaomi and Motorola.

17. Staging
 Funding and Capital Investment by VCs, valued at $ 1bn.
 Human Capita lncreased to 33,000
 First e-comm site to go App only for its Fashion Brand, “Myntra”.
 Started its Brick and Mortar store, getting into Offline retails as well.
 Network of 30,000 vendors started within a year
Economic Logic
 Lowest cost through scale advantage
 Flipkart has its spread across the country and with revenue of $ 4500
mn.
 Target to reach GMV of $ 8 bn by end of the year 2015, current GMV $
4bn.
 Flipkart ships about 8 million units a month.
 Flipkart had already gone past competitors, with the company valued at
about $12.5 billion
 Moving to Market place model also helping in reducing the storage cost
and leveraging the competitive price given by sellers.

18. Differentiator
 Price
 BigBillionDay sale, providing products at the cheapest price possible.
 On going various deals on Mobile Phones and Fashion products.
 Free Home delivery thus reducing the price for customer even further.
 Product Reliability
 Safe online transaction and COD
 30 day replacement for all the products sold by Flipkart
 Customization
 Mobile App provides real time chat with friends to decide upon the purchase.
 Speed to Market
 Moved to market place model and have around 30,000 sellers
 The homegrown e-tailer is also rolling out financial assistance, to the tune of
Rs 50 lakh, for merchants to help them scale
 An amazingly well-oiled warehousing and delivery system
But there is no data yet to show that Flipkart is
differentiated in any way with respect to their competitors

19. • Supplier
• Quality Check
• Pre- Packaging
Inbound
logistics
• Inventory Management
• Physical Placement on ShelvesWarehousing
• Order Processing
• Product Distribution
• Final Packaging
• Placement in Delivery Hubs
Outbound
logistics
• Shipping, Tracking and Reporting
• Returns
• After sales service
Customer
Service
The Value ChainDirectsellersgostraightthroughtooutbound

20. The Supply Chain

21. Performance Review System
 The first e-commerce player to roll out such incentives that go beyond the statutory
requirement
 Continuous six months unpaid leave for a career break or personal loss
 Leave for birthday and anniversary celebrations.
 Extra to the usual list of declared holidays, casual or sick leave (12 days), annual leave
(18 days), and declared holidays.
 Free guidance from professional experts in regards of personal life, career
development, work-life stress, legal and financial issues.
 All employees will be facilitated business class travel during official work, if the
board time is more than six hours.
 Applies to all Flipkart professionals and not only the top management.
 Extended maternity leave of 24 weeks plus four months of flexi-working hours with
full pay, and, if needed, one-year career break without pay

22. Flipkart Investment vs Revenue
2010 2011 2012 2013 2014 2015
Revenue (in millions $) 20 75 500 1,000 2,000 4,500
Investment (in millions $) 10 20 150 360 1,210 1,250
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
http://trak.in/tags/business/2014/06/04/top-10-indian-e-commerce-sites-comparison/
http://www.business-standard.com/article/companies/flipkart-sales-target-2015-flipkart-aims-to-double-sales-to-8-bn-this-year-
115021201560_1.html

23. Mapping Site visits to
Mobile Internet Population for Flipkart
2011 2012 2013 2014 2015
2016
( E )
2017
( E )
2018
( E )
2019
( E )
2020
( E )
Mobile internet users (in
millions)
76 92 115 173 215 289 405 540 751 1,055
Visits/month (in millions) 25 35 51 73 105 148 207 289 405 567
Registered Users (in millions) 4 9 14 22 45 59 76 99 129 167
0
200
400
600
800
1000
1200
1400
1600
1800
2000
http://www.firstpost.com/business/corporate-business/its-not-electronics-flipkarts-fastest-growing-product-category-will-surprise-you-
1966563.html
http://www.forbes.com/sites/saritharai/2015/05/18/indias-largest-e-commerce-firm-flipkart-valued-at-15-5b-its-sachin-binny-bansal-billionaires/

24. Flipkart’s
Big Billion Day
Amazon’s
Great Indian Festive Sale
 28% voted in favor
 Poor logistics
 Numerous complaints from sellers
and buyers despite
 19,000 delivery boys across
20,000 Pin codes
 5 million downloads of app
 70% sale traffic from app
 53% voted in favor
 4x boost over last year (claimed)
 200% traffic increase
 15 minutes earlier access to top deals
 Cash back on HDFC cards
 App-only deals on 16, 17 October
 Sneak peak of deals
economictimes.indiatimes.com › Industry › Services › Retail
http://indianonlineseller.com/2015/10/flipkart-vs-amazon-vs-snapdeal-this-diwali-who-are-you-rooting-for/

25. 4
9
14
22
50
3.4
4.8 4.7 4.4 6.3
25
35
51
73
105
20.9
18.9 17.0
14.7 13.2
0
20
40
60
80
100
120
2011 2012 2013 2014 2015
Registered Users
(in millions)
Reg User buy Rate
Visits/month (in
millions)
No. of Visits/
Purchase
The Ugly Truths
Launch of
Flipkart First

26. Fake Discounts
App crashes

27. Way Forward?
 Flipkart has long been the Golden Boy of Indian startups, but they cannot
continue to bank on it for their business
 Tough competition from Amazon & Snapdeal in terms of service means
they need to crack down harder on mistakes
 Technical faults at every mega-sale needs to be addressed
 New avenues for Customer retention and conversion of new to loyal
customers
 Emphasis to develop a product/service unique to Flipkart, along the lines
of Amazon’s Kindle.
 Reduce dependence on Mobile Phones, Electronics and Clothing
segments for most of their business