Group #5 - Flipkart_final submission
- 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?
- 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
- 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
Editor's Notes
- #4: Internet usage is growing at a rate of 28% in India. However, the rural growth of mobile internet users is at a staggering 75% while the urban community, despite its saturation of mobile internet users still grows at a rate of 16%. This means we will have more than 500 millions internet users by 2017 and will cross the 1,000 million mark by 2020 at this rate. However, our mobile penetration currently stands only at about 19% currently. But at this rate of growth where it took us 10years to cross 100 million internet users but only 3 years to triple that number to 300 million, we can look at an internet penetration of nearly 70%. Developed countries like USA, Japan, Germany etc can boast of nearly 90% internet penetration rates.