flipkart.comCOMPANY PROFILE

Table of Content

1. Analysis of Market Environment

2. Company Overview

3. Business Model Analysis

4. Success Factors

5. SWOT Analysis

6. Porter’s Five Forces Analysis

7. Conclusions

8. References

Analysis of Market Environment• India is one of the world’s leading emerging markets, growing at a rate of 6-7% even through an era

of global economic downturn.

• According to a survey conducted by Assocham, India's e-commerce market grew at a staggering

88% in 2013 to $ 16 billion, riding on booming online retail trends and defying slower economic

growth and spiralling inflation

• India has Internet base of around 150 million as of August, 2013 and this number is increasing day

by day facilitating the growth of the online retailing.

• It is estimated that in India, currently there are approximately 27 million active mobile internet users

and 4% are purchasing products via mobile internet which can go even 20% in coming years.

• India is a big market and increasing living standard and internet usage is a major driver for

development of e retail in India.

• Social networking sites like facebook, twitter, etc are playing a crucial role in influencing people for

buying products online. Many of the vendors are using that platform as strong tool for marketing as

well as sale.

• Among all the categories, Apparel and Accessories segment witnessed the highest growth in

previous years

Company Overview: flipkart.com

• Flipkart is one of the leading Indian e-commerce companies established in 2007

• The company has over 11 different categories, more than 2 million registered users and sale of 30,000 items a day

• Among the top 20 Indian Web sites in terms of traffic• At the beginning, Flipkart focused on online sales of

books but it later expanded to electronic goods and a variety of other products

• It raised funding from venture capital funds Accel India in 2009 and Tiger Global (US$10 million in 2010 and US$20 million in June 2011)

Headquarter Bangalore, Karnataka

Sales Turnover (2013) US $ 200 Million

Start Year 2007

Employees 4578 (aprox.)

Type of Site Online retail

Stand out point Flyte Digital Music Store

Company Introduction

Geographical Presence : Warehouses

Product Offerings

• CDs and DVDs• Mobile Phones &

Accessories• Cameras• Computers• Computer Accessories

And Peripherals

• Pens and Office Supplies

• Home Appliances• Kitchen Appliances• Personal Care Gadgets• Health Care Products• Clothing and Accessories

4

• Bangalore, Karnataka• Chennai, Tamil Nadu• Delhi• Kolkata, West Bengal

• Mumbai, Maharashtra

• Noida, Uttar Pradesh• Pune, Maharashtra• Kochi, Kerala

Acquisition of Letsbuy.com, India's second largest e-

retailer in electronics

Flipkart has bought the company for an estimated US$

25 million

Acquisition of WereadFlipkart acquired this social

book discovery tool for providing Flipkart a social

recommendation platform for buyers to make informed

decisions based on recommendations from

people within their social network

Acquisition of Mime360Flipkart acquired Mime 360 a

digital content platform company

Key Insights

• Increase internet usage in the country and people getting accustomed to making purchases online

• Flipkart was making operational losses on transactions of books that accounted for 65% of its sales volume and 40% of revenue.

Merger and Acquisitions

2010 2011

Acquisition of Chakpak.com, a Bollywood news site that

offers updates, news, photos and videos

Flipkart acquired the rights to Chakpak’s digital catalogue the company also mentioned that it will not be involved with the

original site and will not use the brand name

2011 2012

Company Overview: flipkart.com

2010 2011 2012 20130

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Business Model Analysis: flipkart.com• Flipkart believes that the inventory model is out of trend and the

concept of Marketplace Model is now the • An online marketplace is a type of e-commerce site where product as

well as the inventory information is provided to customer by multiple third parties, whereas transactions are processed by the marketplace operator.

• Under the Market Place Model, the company would not have its own inventory rather buyers can deal with sellers directly and the delivery will be done by Flipkart.

• The company has on-boarded 50 sellers that are selling in books, media, and consumer electronics categories. Clothes, shoes and other categories are expected to follow soon.

• The flipkart business model has following key points:‒ Users have COD/EMI options and return/replacement policies.‒ Flipkart takes care of shipping and doorstep delivery through its

logistics partners.‒ It is expected that there will be soon complaint resolving program

launched by Flipkart.‒ A good mass of online shoppers have an opinion that the user

experience that is product selection, customer service and logistics is very smooth with variety of products.

Buyer 1

Buyer 2

Buyer 3

Seller 2

Seller 3

Seller 1

Platform 1

Platform 2

Platform 3

B2B

Marketplace

Mul

tiple

Buy

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o M

ultip

le S

elle

rs

Competitive Bidding- Auction, Exchange, Grouped Buying, reverse Auction

Success Factors: flipkart.com• First Mover Advantage

Flipkart enjoys the top-of-the-mind brand recall as far as buying books is

concerned. Other portals such as Uread and Dial-a-Book are still struggling to

register their presence into the consumer’s mind.

• Cash on DeliveryThis system simplified the online shopping as many people do not know how to

make payments online. People do not have immense trust in e-commerce also

got facilitated via this.

• Strong Marketing StrategyFlipkart has been mostly marketed by word of mouth advertising. Customer

satisfaction has been their best marketing medium. The company wisely used

SEO (Search Engine Optimization) and Google Ad-words as the marketing tools

to have a far reach in the online world

• Congenial PurchaseIts not necessary to register on the website for buying products. The website

allows a user to purchase products as guest visitor too.

• E-commerce BackgroundThe founders are ex-Amazon employees, hence they are bringing in the required

expertise and skillset needed to run and grow an ecommerce portal.

SWOT Analysis: flipkart.com

Strengths• Monetary assistance provided.• Domestic market presence.• Skilled workforce.• Strong distribution and sales network.• Variety of product offerings.• Two VC investment to build its own delivery system thereby

reduce delivery time.• Cash on delivery which helps in making 60% of the company’s

income• Innovation and technology competence.

Opportunities• Untapped mobile users• Coverage of all parts of India• Tie ups with Book fairs/education institutes.• Capturing untapped global markets• Self e-publishing

Weaknesses• No control over small value orders• Free shipping built costs• Less reach as compared to physical book stores.• Lack of global reach.• Competitive market• Lack of internet know how at many places in India

Threats• Small players are emerging as competitors• Small value orders in remote areas with high delivering costs• Major players like Amazon

• .

S W O T

Porters Five Forces Analysis: flipkart.comSupplier Power: Low

• Large supplier base• The readers are reducing thus

weakening the suppliers position

Barrier to Entry:

Low• High market

potential for this industry

• Low entry barriers, but sustaining is tough

Competitive RivalryMedium

• Many small players such as Snapdeal and Naaptol

• Entry of international giant such as Amazon in India

Buyer Power:High

• Presence of multiple players• Few number of online shoppers

Threat From Substitute:

Low• Traditional book

stores.• Advent of

electronic book readers such as I Pad and Kindle.

Conclusion• The company was funded by the owners themselves with Rs 400,000, Flipkart has since then

raised funding from venture capital funds Accel India in 2009 and Tiger Global (US$10 million in

2010 and US$20 million in June 2011)

• The company registered high growth in sales and number of website visitors

• Being a very new industry in Indian market almost every factor contributes to the key success of

an online book store.

• The company changed its business model in February 2013, moving from online retail to the

marketplace model, in which third parties use its platform to sell products to the customers.

• Flipkart India sold its technology platform and related intellectual properties to another entity

called Flipkart Internet Pvt. Ltd effective on 31 December 2012. The value of the sale of business to

Flipkart Internet was approximately Rs.94.15 crore, as suggested by its filings.

• The strong marketing strategy, variety of products, on time delivery, cash on delivery, etc factors

are the major factors behind the rapid growth of the flipkart.

• The operational loss was due to the investments the company was making in technology, supply

chain, logistics, customer support and marketing to scale up the business

References

• http://

www.thehindubusinessline.com/todays-paper/tp-new-manager/article2507045.ece

• http://www.sramanamitra.com/2010/10/04/building-indias-amazon-flipkart-ceo-sachin-b

ansal-part-1

/

• http://www.cxotoday.com/story/indian-e-commerce-market-grew-at-88/

• http://

www.academia.edu/4120009/E-COMMERCE_TRENDS_IN_THE_CURRENT_SCENARIO

• http://www.flipkart.com/about-us

• http://en.wikipedia.org/wiki/Flipkart

• http://swot.advisorgate.com/swot-f/14920-swot-analysis-flipkart-com.html

• http://www.deccanherald.com/content/190213/indian-e-commerce-firm-flipkart.html

• http://subscriber.hoovers.com/H/company360/overview.html?companyId=862603314

• Many others