Consider a Topdog in Industry “X” ,advise it Brand Chosen : FlipkartIndustry : E-commerce

Industry Analysis :E-commerce in India

Started in India in the year with the introduction of B2B portals in 1996, now E-Commerce is all set to become one of the successful medium for business transactions.

The eras that defined the rise of Ecommerce in India

• Between 2000 and 2005

• Between 2005 and 2010

• From 2010

India’s E-Commerce market was about $2.5 billion in 2009, it went up to $6.3 billion in 2011 and to $16 billion in 2013 and is expected to grow huge $56 billion by 2023 that would be 6.5% of the total retail market.

E-Commerce has led to: • Reduced search and transaction cost• Improved customer service• Improved shopping experience and

convenience• More transparency of information• Quality products and services

Drivers of this industry:1. Mobile for location-based marketing2. Personalization to meet the needs of each customer. 3. Convenience and shopping experience4. Easy accessibility and availability5. Wide range of products6. Low price through offers and discounts

Challenges in the E-commerce industry

1.High return ratio leading to reverse logistics

2.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.

3. 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.

4. Internet penetration is low and the quality of connectivity is also poor.

5. 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.

6. Buying of a product on E-commerce websites does not allow the customers to have a touch and feel experience.

7. 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.

Flipkart, India’s “Amazon”Factsheet:

• Brainchild of Sachin and Binny Bansal that went live in 2007.

• Expected revenues in ’14 : Rs. 75 crores• Expected to raise $500 million from the

perspective of a listing in the NASDAQ next year. Currently it has raised over $750 million in the past 7 years over 5 rounds

• As a market leader it delivers 5 million shipments monthly to 18 million registered users in 150 cities

• It is eyeing a share of about 65 per cent of the online fashion segment in the next 12-18 months.

What made Flipkart a Topdog

• First Mover Benefit: Began with strategically effiecient 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

Adapting to the model for the Indian Market :

• Cash on Delivery was an output of the credit / debit card penetration in the country as against the number of consumers willing to shop online.

• In India, the consumer had to be home for a delivery and leaving the parcel outside wasn’t an option

• They tackled the distribution barrier as a technology problem and developed strong in-house systems

• The currently have a network comprising 19,000 pincodes including far-flung locations

Differentiated Value Added Services :

• Flipkart Student offersFor the brand, the student category makes a perfect fit as they are presumably online – savvy and the brand gets to tap on their consumption pattern at the very beginning of their purchasing cycle.

• Flipkart FirstCapturing the existing gap in the market by providing same day delivery services

Strategies used :

• Calibrated accession for survival: Flipkart took over Myntra for $300-330 million to acquire the market leader in the fashion section.

Current Problem Identification:

“There is absolutely no chance or thought that Flipkart or Myntra will merge as a single brand in the coming times. Flipkart will have a broad catalogue, including that of Myntra, while Myntra will continue to position itself as fashion curator. The merger has happened at the shareholder level, with no change in the experience of the consumer.”

• Threat of Amazon , the parent player cannibalizing the Indian market on a large scale

“Currently the brand has no distinct competitive advantage in terms of brand recognition, customer stickiness, repeat purchases or healthy margins.“

Strengths :Convenience Effective inventory management : Own Logistics Arm e-kartLarge and loyal customer baseExisting distribution and sales networksStrong Brand value and brand awarenessOwn online payment gateway solution Excellent customer serviceOwn Marketplace model

Weaknesses: Investor driven organization or lack of Independent board. Less reach as compared to physical book stores.Higher prices as compared to other websites.Excessive focus on expanding customer base rather than pulling profits.

Opportunities:Growing demand.Online fashion and apparel business.Providing logistics services to its competitors.Growth in online retail sector in IndiaTie ups with educational institutes for providing bulk orders to students/schools.Tie ups with authors to acquire rights.Improve reach and enter new untapped cities.

Threats:Technology upgradation by copettitorsLack of Custumor stickiness owing to variety seeking behaviorNiche websites catering to targetted needsAmazon has launched 22 categories in 10 months

SWOT Analysis

Brand concept map

Flipkart vs Amazon

• Flipkart is a market place model while Amazon is an inventory and marketplace model.

• Flipkart has 1706 SKUs 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 advantge and they are way ahead of amazon.

• Amazon has 1.5 Crore products listed on its website while flipkart has millions of products across 21 categories.

• The daily shipment of flipkart is around 80,000 a day on average while it is 40,000 a day for amazon.

• Amazon in its initial phase is acting like a trendsetter and flipkart is following their concept.

Flipkart• Follows hybrid model, similar to Amazon• Ekart Logistics• Payment through PayZippy

Flipkart• Lead categories, targets every individual who shops

online• Offers everything, except groceries and automobiles• Focus on mobile device which generates 20% of

sales

Snapdeal• Follows pure-play marketplace• Does not handle logistics on its own• Payment through Klickpay

Snapdeal• Target Non-metros, focuses on middle

income market• Focuses on getting unique unbranded

products.• Hand held devices generates 30% of sales

Current Strategy

Flipkart vs Snapdeal

Customer Strategy

Top-Dog Strategy Recommendations:

• Block exposure to evidence: This strategy typically works in a case where there is strong motivation to learn and prior knowledge is well developed in favour of the market leader.

• Reinforce the primary niche of the Brand: Today more than 60 per cent of shoppers on Flipkart are repeat customers. The brand should optimize onto this and should focus on customer stickiness and brand loyalty.

• Setting the Brand Agenda

Topdogs have the market power and can use it to control the consumer’s learning agenda .

Tactic: Value added services for Customer Loyalty: Exclusive Dealerships: Flipkart should create user experiences based on 'All things Flipkart' just as Amazon does with its affordable Kindle Fire

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Thank YouPresented by : Group Number 7Itisha Sharma : DM151Sheikh Shadab : DM15150Shivam Rastogi : DM15151Soochna Sahu : DM15158Suhasini Jain : DM15256Swati Narayan : DM15161