This tactic allowed Flipkart to attract many first time online buyers who now

This tactic allowed flipkart to attract many first

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hassle-free return and exchange policy. This tactic allowed Flipkart to attract many first-time online buyers, who now make up a significant portion of thecompany’s revenues, which were over $1 billion in 2015 (up from only $10 million in 2011, a compound annual growth rate of some 220 percent). Third,Flipkart also introduced an option to purchase expensive items with its EMI (easy monthly installments) program. It accomplished this through associationswith all major banks. In 10 urban areas Flipkart offers same-day delivery and guarantees next-day delivery in more than 65 metropolitan areas.While its business model provided solutions to unique Indian ecommerce challenges, Flipkart diversified quickly into many different product categories.Starting as just an online bookseller, Flipkart now hosts 75 product categories on its platform. Its major product categories include books, electronics andaccessories, lifestyle and fashion, home décor, and do-it-yourself products. While books and electronics continue to be its strongholds, lifestyle and fashionare the fastest-growing segments.Because the Indian government continues to bar foreign direct investment in retail companies, Flipkart (which is financed by non-Indian venture capitalistsfrom the United States, the UK, Russia, and Singapore) had to change its business model. It moved away from Amazon’s model of shipping mainlymerchandise it owns and that requires storage in its own warehouses to now be more akin to Alibaba, hosting third-party sellers. Flipkart morphed into anonline platform that enables other merchants to sell on its website. It makes money by taking a fee on every transaction occurring on its site.After Amazon lost out to Alibaba in China, it entered India in 2013 to sell books, DVDs, electronic goods, and fashion accessories (). Thismade Amazon.com a latecomer to the Indian ecommerce party (see Exhibit MC23.2). Indian ecommerce companies Flipkart and runner-up Snapdeal() are enjoying early-mover advantages over Amazon. Perhaps, even more important, Flipkart was able to leverage its deepunderstanding of the Indian retail market and ecommerce into a competitive advantage. The explosive growth in Indian ecommerce is expected tocontinue, with Morgan Stanley predicting that ecommerce retailing in India will grow to over $100 billion by 2020. And Amazon is catching up fast, havingmatched many of Flipkart’s tactics such as cash on delivery, installment payment plans, and same-day and next-day deliveries. It also offers services thatFlipkart cannot yet match, such as the “fulfilled by Amazon” service (where items offered by a third-party seller on Amazon’s site are shipped from anAmazon fulfillment center and all Amazon standard shipping rates and policies apply to these items). As an indication how fast Amazon is catching up: it
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