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Flipkart 
Vs 
Amazon: 
a case study in e-retailing 
By: 
Sumit Lokhande 
SIEMENS Nashik Works 
1
E-Commerce in India 
IT Act, 2000 
Explosive Growth 
Access to Internet: 11% Indians 
Growth: > 50% Annually 
Sales by 2016: $8.3 billion* 
Contribution to India’s 
GDP by 2020: 4%** 
Source: 
*Crisil (Credit Rating Information Services of India Limited ) 
**KPMG 2
Challenges in E-Commerce 
Industry: 
High return ratio → Reverse Logistics 
High Failure Rate for most Payment Gateways 
Low Internet penetration 
Low Smartphone penetration 
No Touch and feel experience. 
Logistics 
3
Amazon: An Introduction 
American International Headquartered at Seattle 
Started as online bookstore 
Soon diversified selling CDs, DVDs, software, electronics, 
furniture, toys, etc 
Mission: To be world’s largest Customer Centric 
Company 
4
Amazon Business: 
Platforms for Merchants & Associates 
Many acquisition from 1998 till date 
5
Amazon.in Home Page 
6
Flipkart: An Introduction 
Indian e-commerce company headquartered 
in Bangalore, Karnataka. 
Founded by Sachin Bansal and Binny Bansal in 2007. 
Initial focus on online sales of books, but later it 
expanded to electronic goods etc 
Multiple Payment Methods 
7
Innovation 
Delivery within 2 Days 
30 Days return policy 
Card Swipe on 
delivery 
Comparison of 
products made easy 
Browsing made easy 
Exclusive Launch at 
aggressive prices. 
(Eg., Moto E) 
8
Flipkart: Home Page 
9
Sales Promotion: Flipkart 
Apart from Television Commercial, Flipkart relies more 
on word of mouth publicity. 
Other Promotional Techniques include: 
Rebate & Discounts 
Refunds 
Quantity Deals/ Gifts 
Full Finance @ 0% 
10
The Road Ahead For Flipkart: 
Glowing Reviews 
Niche Product: DigiFlip 
Value Added Differentiation: Focus on customer & 
Providing Customization of Products. 
Aggressive marketing for the Mobile App 
11
SWOT Analysis: Flipkart 
12
Business Level Strategies: 
Flipkart 
Word of mouth advertising 
Customer satisfaction 
Wise Use of Search Engine 
Optimization (SEO) and Ad Words 
Social Media 
Ekart 
13
Strategic Evaluation: Flipkart 
14
Flipkart Journey 
• First Mover Benefit 
• Pioneering innovation: Sales of Motorola, Xiaomi 
• Excellent Service and Product Quality 
• Ease of use 
• Market leader despite offering relatively high prices 
• Discounts and free shipping 
• Successful WOM marketing 
15
Flipkart’s Big Billion Day 
Sale: 
16
Marketin 
g Tactic: 
• Special Mailers 
• Target Sales: 
Rs. 1 Billion 
•Achieved Sales: 
Rs. 6.14 Billion 
17
Market Place Model Inventory & Market Place Model 
1706 SKUs 
1535 SKUs 
4172 Offers 
2244 Offers 
Camera Prices costlier Camera Prices cheaper 
Laptop Prices Cheaper Laptop Prices costlier 
18
Business Model/ Marketing 
Mix 
Flipkart is a Marketplace model 
Sub Brand ‘DigiFlip’ 
Ekart Logistics for competitors 
Hand to Hand Exchange via Myntra Logistics 
19
Marketing Innovation 
FlipKARDs for Brand Loyal 
Reward coupons for Product Reviews 
Expert Advice from Tech Bloggers 
Modeled Clothes as per Size Chart 
Flipkard 
Loyalty Programme 
Discounts. Coupons. Sale. 
20
Retaining Leadership 
Position 
Customized Products 
Develop IT Infrastructure 
Complement Product Purchase 
Renovate & Expand Business 
Increase No. of Sellers 
More features on Mobile App 
21
OPEN FOR QUESTIONS 
THANK YOU 
22

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Flipkart Vs Amazon- A Case Study on e retailing.

  • 1. Flipkart Vs Amazon: a case study in e-retailing By: Sumit Lokhande SIEMENS Nashik Works 1
  • 2. E-Commerce in India IT Act, 2000 Explosive Growth Access to Internet: 11% Indians Growth: > 50% Annually Sales by 2016: $8.3 billion* Contribution to India’s GDP by 2020: 4%** Source: *Crisil (Credit Rating Information Services of India Limited ) **KPMG 2
  • 3. Challenges in E-Commerce Industry: High return ratio → Reverse Logistics High Failure Rate for most Payment Gateways Low Internet penetration Low Smartphone penetration No Touch and feel experience. Logistics 3
  • 4. Amazon: An Introduction American International Headquartered at Seattle Started as online bookstore Soon diversified selling CDs, DVDs, software, electronics, furniture, toys, etc Mission: To be world’s largest Customer Centric Company 4
  • 5. Amazon Business: Platforms for Merchants & Associates Many acquisition from 1998 till date 5
  • 7. Flipkart: An Introduction Indian e-commerce company headquartered in Bangalore, Karnataka. Founded by Sachin Bansal and Binny Bansal in 2007. Initial focus on online sales of books, but later it expanded to electronic goods etc Multiple Payment Methods 7
  • 8. Innovation Delivery within 2 Days 30 Days return policy Card Swipe on delivery Comparison of products made easy Browsing made easy Exclusive Launch at aggressive prices. (Eg., Moto E) 8
  • 10. Sales Promotion: Flipkart Apart from Television Commercial, Flipkart relies more on word of mouth publicity. Other Promotional Techniques include: Rebate & Discounts Refunds Quantity Deals/ Gifts Full Finance @ 0% 10
  • 11. The Road Ahead For Flipkart: Glowing Reviews Niche Product: DigiFlip Value Added Differentiation: Focus on customer & Providing Customization of Products. Aggressive marketing for the Mobile App 11
  • 13. Business Level Strategies: Flipkart Word of mouth advertising Customer satisfaction Wise Use of Search Engine Optimization (SEO) and Ad Words Social Media Ekart 13
  • 15. Flipkart Journey • First Mover Benefit • Pioneering innovation: Sales of Motorola, Xiaomi • Excellent Service and Product Quality • Ease of use • Market leader despite offering relatively high prices • Discounts and free shipping • Successful WOM marketing 15
  • 16. Flipkart’s Big Billion Day Sale: 16
  • 17. Marketin g Tactic: • Special Mailers • Target Sales: Rs. 1 Billion •Achieved Sales: Rs. 6.14 Billion 17
  • 18. Market Place Model Inventory & Market Place Model 1706 SKUs 1535 SKUs 4172 Offers 2244 Offers Camera Prices costlier Camera Prices cheaper Laptop Prices Cheaper Laptop Prices costlier 18
  • 19. Business Model/ Marketing Mix Flipkart is a Marketplace model Sub Brand ‘DigiFlip’ Ekart Logistics for competitors Hand to Hand Exchange via Myntra Logistics 19
  • 20. Marketing Innovation FlipKARDs for Brand Loyal Reward coupons for Product Reviews Expert Advice from Tech Bloggers Modeled Clothes as per Size Chart Flipkard Loyalty Programme Discounts. Coupons. Sale. 20
  • 21. Retaining Leadership Position Customized Products Develop IT Infrastructure Complement Product Purchase Renovate & Expand Business Increase No. of Sellers More features on Mobile App 21
  • 22. OPEN FOR QUESTIONS THANK YOU 22

Editor's Notes

  1. The Information Technology Act, 2000 governs the basic applicability of e-commerce. India’s e commerce revenue has grown explosively over the past three years despite only 11% of Indians have access to Internet. Access to Internet: 11% Indians Online Sales Growth: >50% Annually Estimate sales by 2016:$8.3 billion* Contribution to India’s GDP by 2020: 4%**
  2. High return ratio leading to reverse logistics Preference to Cash on delivery mode due to low credit card penetration and less trust on online transactions. Such transactions are expensive for the seller. Most payment gateways have a high failure rate. This leads to loss out of business as several customers do not reattempt to do the payment. Internet penetration is low and the quality of connectivity is also poor. Smartphone penetration is not significant in India. 40% of Flipkart’s transactions are done on mobile. The customer base can be increased with higher penetration of Smartphone. Buying of a product on E-commerce websites does not allow the customers to have a touch and feel experience. Logistics is a problem in thousands of Indian towns. Due to the inaccessibility of many small towns in India is a factor driving the logistics problem. COD aggravates this problem.
  3. Fourth successful startup company of all time by Market Capitalization, Revenue, Growth & Cultural Impact.
  4. Flipkart was founded in 2007 by Bansal Brothers, both alumni of the IIT, Delhi. They worked for Amazon before quitting & founding their own company. In its initial years, Flipkart focused on online sales of books. Today , Flipkart is amongst the top 20 Indian Web sites and has been credited with being India's largest online bookseller with over 11 million titles on offer. In 2012, Flipkart added A.C, air coolers, stationery supplies & life style products to its product portfolio. As of today, Flipkart employs more than 5000 people. Major Acquisitions like WeRead, Letsbuy.com
  5. Glowing Reviews Niche Product: Like Amazon has Kindle, Flipkart has come up with DigiFlip as a brand for its mobile handsets & bags Value Added Differentiation: Focus on customer & Providing Customization of Products. Aggressive marketing for the Mobile App by providing special discounts foreseeing the mobile Internet penetration in India.
  6. Flipkart has been mostly marketed by word of mouth advertising. Customer satisfaction has been their best marketing medium. Wise Use of Search Engine Optimization (SEO) and Google Ad Words. Over 9 lakhs Facebook Page Likes Have their own SCM Company named Ekart
  7. Flipkart's reported sales were 40 million in FY 2008–2009 200 million in FY 2009–2010 750 million for FY 2010–2011 5 billion (US$100 million) for 2011-2012 Flipkart.com is India's first billion-dollar-valued Internet Company!
  8. First Mover Benefit: Began with strategically efficient product categories : books ,electronics Pioneering innovation :Sales of Motorola series have clocked 1 million pieces in 5 months .Currently looking to stock the leading Chinese brand ,Xiaomi Excellent service and product quality contributing to maximum amount of Credibility in the market Ease of use :Simple and user friendly interface and ease of transactions Market leader despite offering relatively high prices Discounts and free shipping Successful WOM marketing
  9. Flipkart is a market place model while Amazon is an inventory and marketplace model. Flipkart has 1706 SKUs (Stock Keeping Unit) in stock and 4172 offers while Amazon has 1535 SKUs in stock and 2244 offers. Mobile category is quite price sensitive and fight is very intense between Flipkart and Amazon. In cameras category Amazon offers better prices than Flipkart. In Laptops category Flipkart has great advantage and they are way ahead of Amazon.
  10. This is the dream Flipkart founders /investors are hoping for day in and day out. The question then will be about what the price will be. If we look at history, it's similar to what Ramesh Chauhan of Parle soft drinks faced when Coke was trying to enter India. He sold off 4 brands: Thumsup, Gold sport, limca and one other for a price of 750 crores when a reasonable value was more likely 275 to 300 crores. It's rumored that Flipkart founders have already asked for 2 billion USD which Amazon thought was ridiculous and turned down. This is the kind of exits current investors are hoping for. Amazon brings in its own expertise, processes, patents, IP, brand and offers superior buying experience thereby wiping flipkart out of existence. The problem which flipkart has solved( Logistics) is a commodity and can easily be replicated. The customers quickly switch to Amazon. Finally, Flipkart is sold for a small amount to Amazon. It would be disastrous for founders and investors. Amazon is not able to find its feet in the country. Flipkart finds the battle tough. If Bansals get the government to protect it. Example :Naukri Versus Monster showdown, Flipkart becomes #1 and Amazon is comfortable playing the second fiddle. LESS PROBABILITY