Marketing Management - 1

Pioneer in E-Tailing

Harsh Biltu Agarwal 15DM049

Introduction Online Retail Industry

It is one of the leading e-commerce players in the country

With over 11.5 million book titles listed, 11 different categories, more than 2 million registered users and sale of 30000 items a day.

Founded by Sachin bansal & Binny bansal in Bangalore, Karnataka in 2007.

Started with initial capital of INR 4 lakh.

14000 employees till December 2014.

Subsidiaries are “We Read”, “Mime 360” ,“Lets Buy” ,“Myntra” , “Adiquity” , “Apetirate”

Management Team

Sachin BansalCEO and Co-founder

Binny BansalCOO and Co-founder

Sachin spent his early years in Chandigarh. He graduated from IIT-Delhiwith a degree in Computer Engineering. In 2006 he joined Amazon.comin India which he later left to set-up Flipkart.

As CEO, Sachin oversees all the customer facing activities of the companyranging from technology to marketing. He is also in charge of Flipkart'scorporate divisions which include the finance and legal departments

Born and raised in Chandigarh, Binny went on to get a degree in ComputerEngineering from IIT Delhi. He had a brief stint at Amazon before takingthe entrepreneurial plunge with Flipkart.

At Flipkart, Binny oversees all operational activities that come into playfrom the time the customer places an order till the time of delivery. Thisspans across divisions like warehousing, logistics and customer support.

Flipkart was established in 2007 by Sachin Bansal and Binny Bansal, both alumni of the

Indian Institute of Technology Delhi.

They worked for Amazon.com before quitting and founding their own company.

Initially they used word of mouth marketing to popularize their company.

A few months later, the company sold its first book on flipkart.com - John Woods' Leaving

Microsoft to Change the World.

Today, as per Alexa traffic rankings, Flipkart is among the top 10 Indian web sites and has

been credited with being India's largest online bookseller with over 11 million titles on offer.

The store started with selling books and in 2010 branched out to selling CDs, DVDs, mobile

phones & accessories, cameras, computers, computer accessories and peripherals, pens &

office supplies, other electronic items such as home appliances, kitchen appliances, personal

care gadgets, health care products etc.

As of today, Flipkart employs over 14000+ people.

Company History

Funding

Initially funded by the Bansals themselves with 4 Lakhs(INR).

Flipkart has since then raised two rounds of funding from venture capital funds Accel India (in 2009) and Tiger Global Management (up to the tune of US$10 million) (in 2010).

Private equity firms Carlyle and General Atlantic are in talks to jointly invest about $150 million to $200 million in Flipkart, according to sources.

Acquisitions

2010: WEREAD, a social book discovery tool . The stated goal was to give Flipkart a socialrecommendation platform for buyers to make informed decisions based onrecommendations from people within their social network.

2011: Mime360, a digital content platform company.

2011: Chakpak.com is a Bollywood news site that offers updates, news, photos andvideos. Flipkart acquired the rights to Chakpak’s digital catalogue which includes 40,000filmographies, 10,000 movies and close to 50,000 ratings.

2012: Letsbuy.com is India's second largest e-retailer in electronics. Flipkart has boughtthe company for an estimated US$ 25 million.

2013-2014: Myntra.com, AdlQuity, Appiterate.

Competitor Analysis

Flipkart is the market Leader with the market share of around 44%

Snapdeal is the market challenger with 32% of the market share

Amazon India is in the market with 15% and is ranked 3rd in the list

The rest of the share is shared by sites like YEPME, JABONG, MYDAALA.COm

Screenshot

They will be far ahead in the game, by the time Amazon make a full fledge entrywith their own brand retail products in India.

It will make Flipkart stronger in the field of E-retailing.

This acquisition fits in to their strategy of building dominant shares in all thecategories they operate in.

The price they paid for this opportunity was very attractive.

This will now, allow them to accelerate faster and to get to a share similar to whatthey enjoy in online books category.

This will strengthen the position of Flipkart in Indian market in light of the quietentry of Amazon in Indian e-commerce industry through jungle.com.

Why they acquired

What Went Right for Flipkart! The first and foremost was that we Indians were discarding our stone-age ways and beginning to shop online.

Another thing the two entrepreneurs, Sachin and Binny Bansal, did right was that they started off with books – a low capital investment and a fast turn-around time.

But the best thing they did was that they understood that too be successful in India, you need to be the God of Distribution.

In India, it’s amazing Logistics that prove to be the game-changer and that’s exactly what the folks at Flipkart have done.

Challenges Faced By Flipkart Initially when they started out, it wasn’t easy for us to earn the trust of the customer.

Handling customer complaints, without having a ‘face’ to our customer serviceproves to be bit of a challenge at times.

Not having the ‘display’ advantage, the ‘browsing’ feature and not being able to carryout promotional activities are some other obvious challenges.

The discomfort of paying by cards, on account of security fears is another challenge.They have now tried to address that by introducing the ‘cash-on-delivery’ option.

The fact that highest number of orders and sales get registered during weekendsproves to be tough at times for logistics and customer service.

The fact that we have to work 24 / 7 and the customer perceptions around it alsobring some difficulty (For example, the customer places an order at 12 am and countsthe number of hours for delivery right from then!)

What makes it stand out?

The procurement model is at the heart of Flipkart’s success, as most delays ortroubles occur in this part of business.

Flipkart employed consignment model i.e. procurement based on demand.

It is the robust logistics at Flipkart that sets it apart from other wannabe e-commerce sites.

An amazingly well-oiled warehousing and delivery system..

They offer a huge range of titles (more than 7 million) which really sets them apartfrom the rest of the crowd.

Flipkart has been mostly marketed by word of mouth advertising.

Customer satisfaction has been their best marketing medium.

Flipkart very wisely used SEO (Search Engine Optimization) and Google Ad-words as the marketing tools to have a far reach in the online world.

Flipkart.com official Face book page has close to 9 lac 'likes'. Flipkart recently launched a series of 3 ads with the tag line - "No Kidding No worries"

Kids were used to create the adverts to send out the message - if a kid can do it, you can also do it.

All in all to create a great customer experience.

Marketing Strategy

Flipkart’s Success mantra! Great customer service

Flipkart users are more satisfied than that of their competitors. Great customer service hasbeen its hallmark.

Easy to use website, hassle free payment system

The user interface is sleek and easy to use.

Cash on delivery/Card on delivery mode of payment

This has been a major instrument in Flipkart’s success. Almost 60% of its sales happenthrough this mode. Cash on delivery created trust in the minds of Indian customers who werealways weary of making payments online.

Focused on user experience

Every other e-commerce site, tried to cram the maximum of amount of information possibleinto every single page where as Flipkart focused on providing only the relevant info.

Advertisements By Flipkart

Flipkart has added a prepaid Wallet feature to its e-commerce platform thatallows shoppers to store money on the site and use it to purchase items, without having toreach for their credit card for each transaction.

Prepaid Wallet feature

Strengths:-1.Largest Market Share of Around 44%2Very good customer support and after sale service Facilities likes same day delivery or delivery within 24 hrs of purchase Dedicated workforce

Weakness:-1.Pricing is relatively higher at times compared to other sites2. Some customers are not given genuine products at times .3. Heavy dependence on technology4. Less Offline support

Opportunities:-India’s E- Retail market to grow up to $76 billion by 2021Increasing number internet users and online consumers Gain the share of its competitors by providing quality goods and services Tap the growing opportunities in the online industry except E-tailing

Threats:-Market challengers like Snapdeal and Amazon India Government regulations are getting stringentSome small market followers are possessing price war threats Operating on very low profit margin can be fatal in the long run

SWOT ANALYSIS

BCG matrix is also commonly called “BOSTON BOX”.

This matrix was created by Dr. Bruce Henderson of Boston consultancy group whichbroadly describes the company on four categories based on two parameters

Market share of the company ( measured on X axis)

Market / industry growth rate ( measured on Y axis)

BCG MATRIX OF THE COMPANY

CASH COW

RELATIVE MARKET SHARE

CASH COW DOGS

QUESTION MARKSTAR

HIGHH

IGH

LOWLO

WM

AR

KET

GR

OW

TH R

ATE

FLIPKART

ANSOFF MATRIX

The Ansoff grid focuses on two important aspects such as products and market. If the company hasexisting product in new market it has to focus on product development and if the products are also new andthe market is also new then the company has to focus on product diversification.

Here in this case my company of study that is Flipkart, is already present in the market so the companyshould focus on Market Penetration to gain edge over their competitors. The company should also focus onproduct and market differentiation also.

CASH COW

Existing Products

Exis

tin

g P

rod

uct

s

New Products

New

Pro

du

cts

Market Penetration

ProductDevelopment

MarketDevelopment

Diversification

Future Road Map They aim at 10 times growth, and eyes at $ 1Billion sales by end of 2015.

They will look at bigger investments in their supply chain and technology.

Investment will be made in large warehouses and increased automation of theirprocess, so that the product is not delayed.

They intend to enter in to various new categories and expand their current categoriesas well.

Everything except for groceries and automobiles will be available on Flipkart in future.

To go further in the value chain, Flipkart is looking at associations with a larger numberof suppliers and partners, both nationally and internationally.

Flipkart, the first billion dollar Internet company from India(going by 2015 estimates )is byfar the leading online store in the nation.

Now that Amazon has entered market in early 2012, this news becomes even moresignificant, considering that Amazon has previously, and unsuccessfully, tried acquiring thecompany, with Flipkart demanding a very high buyout price.

With online retail industry in India pegged to reach $1.5 billion (2015), sources suggest thate-commerce is just hoting up in India and we may soon seen many more Internet companiesachieving similar success

Conclusion

ReferenceWikipedia.com

Investopedia.com

Flipkart.com

Howstuffworks.com

Slideshare.net

Gartner's Report

Wall street Journal

Thank You