Flipkart Case Study: Its Digital Marketing and Strategy in times of COVID-19!
Here is one another post popular flipkart case study by CIDM institute. Flipkart Co-founded by Sachin Bansal and Binny Bansal in October 2007, Flipkart.com paved the way of e-commerce revolution in India. Both Bansals have worked in Amazon and had technical expertise as a coder. So, technology had to be the backbone of this Indian venture. Flipkart started much before the digital Indian government’s ‘Make in India’ and digitisation initiative. With the humble starting as a virtual bookstore, it is now the country’s largest e-commerce player. It has grown by leaps and bounds and has its delivery network for smooth and faster delivery. Paytm, OYO rooms case study and Zomato case studies are also very popular Indian companies which are taught in Harvard bruises schools.
The Journey of Flipkart: From an online bookstore to the e-commerce giant, it is!
Flipkart case study shows high values and high technical background are the base of this company. The e-commerce giant was the first to offer an exclusive feature such as 30-day return guarantee, and Cash on Delivery. It worked well not only for early adopters but also for the price-sensitive segment. It helped in easing out the transition of its Indian customers, making the switch from offline to online shopping smoother and streamlined. From books to exclusive launches with OEMs, this e-commerce unicorn has its product offering spread across twelve broad categories such as computers, camera, kitchen appliances, healthcare products, stationery items, TVs, home theatre, and many more.
Flipkart Online Music Platform Flyte was a Failure
Flipkart had also launched an online music platform, Flyte and shut it down little over a year due to poor customer traction for a single-track model. The e-commerce giant was started with an investment of Rupee four lakh only, especially when India’s e-commerce trade and repertoire with online platform hadn’t been particularly favourable. Books were okay, to begin with, but launching smartphones, establishing into an expensive domain of equipment and creating a name to reckon with in a segment- where Indian customers weren’t comfortable to pay money for before receiving a product- is noteworthy. Flipkart should be credited for establishing trust within the customers for paying upfront. Maybe starting with books wasa thoughtful approach to launch their dream project. Books are a more natural way to procure customers, they are accessible segment to breakthrough, and the prices of books aren’t a significant deterrent. There weren’t streaming platforms like Netflix or Hotstar available; hence, books enjoyed a vast range of takers. Besides, there isn’t any logistic issue involved in the transit apart from being a cheap copy. Books can quickly be delivered, there is no wear and tear, and they are inexpensive.
Flipkart’s Customer Relationships Case Study
Flipkart cashed in on the intellectual property of books and banked on the consignment model of procuring products on demand. It signed up with two models in Bengaluru, where it is based out of. The e-commerce would procure a book from any of the dealers; pack it, and courier it to the customer. The company was receiving over 100 book orders per day and providing country-wide shipping. The zeal to succeed, extend the customer base and offer excellent services was high without letting the limited resource come in the way. Since there was no money to hire cutting-edge CRM or customer support personnel, the founders’ phone numbers were listed on the website. The idea was to focus on customer services, and customer satisfaction so that when the company expands, it has their trust and base. The user experience and technology have always been core expertise of Flipkart. The website loads faster and is mobile-optimised and offers hassle-free user experience. The e-commerce website now has an app too, which is light, and easy to browse as well. Flipkart started early and had the head star when there were no competitors, and they could grow unabashedly. They had room to grow, make mistakes and learn from them without virtue signalling.
Flipkarts Opens Its Warehouse
With time, Flipkart opened warehouses in Bengaluru, Delhi, Mumbai and Kolkata and went on to work with more than five hundred suppliers. The e-commerce giant handles more than eighty per cent order through its warehouse, which is centrally managed and governed for quality services. In the e-commerce domain, Flipkart competes with the international conglomerate Amazon and Snapdeal at the home turf. It acquired Myntra and Jabong, once the leading names in apparel and established itself right there in the centre. The e-commerce giant has pursued the expansion strategy with such enthusiasm that it took Amazon by the horn in the smartphone segment. Flipkart also owns (acquired) a UPI or Unified Payments Interface-based mobile payment-slash- digital wallet service called PhonePe.
Case study on Flipkart Became Indian E commerce Giant
The e-commerce giant was valued at $20 billion by the U.S. based retail chain, Walmart, which acquired seventy-seven per cent controlling stake in the company.
Even during its online book store days, it acquired Lulu.com’s Bengaluru-based book discovery service called weRead. It aggressively expanded itself into the domain of digital distribution with its acquisition of Bollywood news site Chakpak and Mime360.com
It also took over a fledgeling online electronics retailer, Letsbuy and a Delhi-based mobile marketing automation startup called Appiterate to boost its mobile services. Myntra still operates as a standalone e-commerce market, focused on offering fashion and home decor at pocket-friendly prices.
Flipkart also initiated a new trend in the Indian e-commerce segment by partnering with OEMs and offering exclusive flagship to its customers. In the year 2014, it set the wheel in the motion of such many more collaboration with its first partnership with Motorola Mobility. It launched Moto G and Moto E – budget-friendly Android segment. Since the smartphones were affordable, it generated colossal traction and caused the website to crash twice. The company subsequently tied up with Chinese OEM Xiaomi for its Xiaomi Mi3, Redmi 1S and Redmi Note as well as Micromax’s Yu Yunique. The smartphones’ online release saw unprecedented sales with more than 10,000 units being sold in a few second of their launch!
Flipkart has several in-house brands such as Citron, Smartbuy, Billion and MarQ. Billion proved to be a damp squib and couldn’t take off. MarQ ran into branding controversy with Marc Enterprises. The company also launched a 55-inch Android smart TV 4K that went as quickly as it came.
Flipkart Milestones (Or not) achieved through the years
Year 2012
Case study on Flipkart shows they had tough-times. The Enforcement Directorate raided Flipkart offices and seized documents and computer hard drives to look into the alleged violations of FDI regulations.
Year 2014
The Regulatory Authority found Flipkart to be in violation of the FEMA. Several competitors, including Future Group of Big Bazaar fame, aren’t particularly happy with the discounts policy of online retailers. This is why it filed a complaint with the Ministry of Commerce and Industry, GOI for predatory pricing and urged to regulate online marketplaces for a symbiotic existence. This case study on Flipkart showing various attributes about how a company face legal issues and then come out of it with implementing proper business ethics with customers.
Year 2015-2017
While making Flipkart case study, its found that year 2015 to year 2017 was full of uncertainties and dramatically changes in Indian eCommerce industry. 2015-2017 was a year of unprecedented growth for Flipkart. The company expanded ruthlessly and acquired startups and small companies left, right and centre to fuel its growth. It also acquired a small stake in MapmyIndia to improve delivery and logistics. In 2017, the company made a significant US$2 million investment in a parenting information startup named Tinystep. Later this year, eBay sold its Indian subsidiary to Flipkart and made a cash investment of whopping US$500 million! The company planned to cash in on the vast network of international vendors, but eventually, this partnership proved to be a damp squib.
The primary rival company, Snapdeal also refused its acquisition offer valued at US$ 700-800, for a more lucrative offer of at least US$1 billion, which didn’t prove to be fruitful for the former. Snapdeal never could recover from the blow of its losses.
Flipkart Big Billion Day Case Study- A revolution
The concept of Big Billion Day (On the similar lines of Cyber Monday) by Flipkart during the Diwali season boosts the company’ sales like never before. As per an estimate, the company sells goods worth US$ 100 million in less than twelve hours during this sale. However, it hasn’t been without its fair share of criticism and social media controversies over price bumps, shortage of stocks, technical glitch and delayed delivery. Flipkart not only revolutionised the e-commerce space but also was the trendsetter in creating an ‘app only’ space. Furthermore, its standalone subsidiary Myntra blocked access to its desktop website and moved to operate through its app. While it was an unprecedented move, it was an abrupt and forced one. The users weren’t ready to make the transition, and thus the sales of Myntra dropped to ten per cent. Flipkart traced its steps back and reinstated the website in 2016. However, at present, the user experience offered by the app is phenomenal! This microsite puts forth blog, style advice and products optimised for mobile browsing. Similarly, in 2015, Flipkart launched a pop-up on its desktop website to encourage users to download its app. Upon seeing the lukewarm response on Myntra, Flipkart shelved its plan to go for an app-only experience. However, it launched its mobile website called Flipkart Lite in November 2015 to enable light smartphone browsing.
Flipkart Internal Challenges Case Study
To launch its app in full gear, Flipkart announced its much-awaited Big Billion Day as an app-only event in the year 2015. However, to gauge the interest, it increased the duration of its annual event. The company officials also ensured the rectification of leaks and loopholes in the supply chain. Over time, it increased its capacity of fulfillment centre as well. This year, the startup achieved its gross merchandise value worth US$ 300 million during this event alone where the most substantial value was generated by the sales of smartphones, and the largest volume of sales went to fashion. Flipkart also came under fire for violating net neutrality by becoming a partner in the Airtel Zero program. The e-retailer retracted its steps on it after facing a massive backlash on Twitter.
Case study on flipkart has become very interesting to know the facts that challenges never dies to stay on top of the race. While the company and customers couldn’t stop gushing about its lightning-fast delivery, the ground realities were a stark contrast from what was presented. Its in-house logistic arm, eKart ran into trouble as its 400 employees accused the management of forcing them to work in unhealthy working conditions such as the lack of basic amenities such as clean toilets, medical assistance for riders, e xtended workhours, seven-day week and so on.
After a delivery executive,Nanjunda Swamy was murdered by a customer over a CoD product, Flipkart launched a safety initiative called ‘Project Nanjunda’ for its delivery agents and an SOS button.
Year 2017 – A Successful Year For Flipkart
This year Flipkart left Amazon India behind and grabbed a significant fifty-one per cent share in the smartphone segment. It sold 1.3 million phones in just the first twenty hours on September 21, 2017, on Big Billion Day as compared to 2.5 million phones in five days in the year 2016. It also shows the adoption of users towards online shopping vis-à-vis.
In the year 2017, the e-commerce giant had more than 40 per cent share of the Indian e-commerce market. Its presence is also bolstered by its aggressive merger and acquisition policy.
Year 2018 – Money Came but Company Gone
This case study on flipkart turned its gear in the year 2018, now company gets the money it was looking for and find time to exit by giving challenges to some other shoulders.
Global retail giant, Walmart won a bidding war against Amazon and paid US$16 billion to buy a majority stake in Flipkart. This acquisition was the world’s largest e-commerce takeover. Walmart’s shares tanked badly on the New York Stock Exchange fearing the former’s acquisition of a loss-making entity. Sachin Bansal also left the company soon after the acquisition. Now, the Flipkart employees, including the top management report to CEO of Walmart e-commerce US, Marc Lore.
This acquisition was hailed by the Walmart President, Dough McMillon, who was delighted to partner with a company trailblazing the path of digital transformation in a growing market like India. However, Indian traders, mom and pop stores in India felt threatened by this acquisition and termed it as a threat to the domestic business. Following this deal, Walmart stated that the minority stakeholders in Flipkart could be presented with an opportunity of a public offering. This announcement prompted eBay to sell its stake worth US$1.1 billion. Softbank too sold nearly twenty per cent stake in Flipkart to Walmart.
On August 18, 2018, the acquisition finally saw the light of the day. Walmart also provided equity funding worth US$2 billion to Flipkart.
Shortly after, on November 13, 2018, in a big jolt to the e-commerce system, the other co-founder, Binny Bansal, resigned over charges of grave personal misconduct of sexual harassment. While Binny vehemently denies the allegations, the independent investigation also didn’t find any evidence to corroborate the charges. However, Walmart maintains that several lapses in judgment were found on Binny’s part, including a lack of transparency to deal with the situation at hand.
Year 2019 – A new start
Flipkart case study has taken many turns and in 2019, the startup and the U.S.based Authentic Brands came together to license and manage Nautica stores in India.
The company also invested $4 million in a reward platform, EasyRewardz to boost customer engagement. The year 2019 also saw the launch of Flipkart Video, a direct face-off in the direction of Amazon Prime Video. The initial content is sourced from the streaming platforms like Voot, TVF and Viu. Much like Zomato, it also started streaming original content as Flipkart Video Originals.
Year 2020 – pandemic outbreak
Major e-retailers like Flipkart and Amazon halted their operations and services on March 25, 2020,in the wake of coronavirus pandemic outbreak. Later, Flipkart partnered with Uber India to deliver everyday essential items in metro cities like Mumbai, Delhi and Bengaluru amidst COVID-19 national lockdown. This partnership enabled hundred and thousands of India to stay at home and support in breaking the chain.
SachinBansal, the co-founder of Flipkart, said it a long ago what the world leaders realise now.
“IT WOULD BE A MISTAKE IF THE INTERNET AND TECHNOLOGY AREN’T CONSIDERED AS A STRATEGIC SECTOR AND WE KEEP ON DEPENDING ON CHINA TO BUILD THAT FOR US…WE HAVE THE CAPABILITY AND WE HAVE THE KNOW-HOW TO DO THIS IN INDIA TO MAKE IT HAPPEN FOR US.”
Operation and Flipkart Business Structure Case Study
Flipkart works through a complex business model enabled by several business entities based out of India and Singapore. In the wake of new FDI rules to reduce dependency on one vendor, the company stopped selling via its in-house vendor, WS Retail. Later, to reduce its operational expenses, it was sold to a syndicate of investors.
What are Funding Source of Flipkart?
Case study on flipkart funding source is very exciting, its very hard to see such success and digest it with ease. Flipkart raised money from investment partners in several rounds. Here’s the year-wise roundup.
2009
While the co-founders spent mere Rupee four lakhs on setting up the website, it went on toraise US$1 million in the year 2009 from Accel India.
2010-2011
In the year 2010 and 2011, it raised US$ 10 million and US$ 20 million respectively from Tiger Global.
2012
Flipkart also raised its final round of funding worth US$150 million from Naspers Group and ICONIQ Capital in 2012. It also raised an additional round of financing of US$200 from its consortium of investors-Accel Partners, Iconiq Capital, Tiger Global and Naspers.
2013
Morgan Stanley Wealth Management, Dragoneer Investment Group, Sofina SA, Vulcan Inc. also raised a US$ 160 million for the company.
2014 Yuri Milner’s DST Global as well asthe existing investors such as Naspers, Iconiq Capital and Tiger Global, raised US$210 million for the company. The speculations were rife that the company is looking for the U.S. listing in 2016 and is striving to build funding for at least US$500 million before that. Later this year, the e-com retailer went on to raise US$1 billion for Tiger Global, Accel Partners, Morgan Stanley and a Singapore-based fund GIC.
Case Study on How Flipkart Valuation Increases?
Flipkart managed to increase its valuation up to $11 billion as it raised $700 million in December 2014. This case study shows us how to take the business using investment and how can we further valuate our company to make it bigger.
Later this year, the e-com retailer filed with Singapore-based ACRA to become a public company. Once its funding capital reached $700 million, its number of investors exceeded and it went on to add new investors such as Steadview Capital, Qatar Investment Authority, Greenoaks Capital, T. Rowe Price Associates and Baillie Gifford.
2015
Flipkart continued to acquire considerable funding (US$550 million) from its investors and managed to raise its valuation to $15 billion. In August, it had raised nearly $3 billion from sixteen investors in twelve rounds of funding.
2017
Flipkart raised its valuation to US$11.6 billion with another funding of US$1.4 billion from Microsoft, Tencent and eBay. Softbank Vision Fund also invested US$2.5 billion in the company during this year.
2018
In September, Flipkart’s Singapore entity put ₹3,463 crores into its Indian Flipkart for regulatory formalities.
Digital Marketing Case Study on Flipkart
Like Paytm, Flipkart realised that social media platforms are best utilised as humanely as possible. It has used its Twitter account to promote products, organise contests and generate some organic traffic. However, like any other brand, the e-com retailer went through retractions, witty wars of words and apologies. Flipkart won several awards in gold category at SAMMIE 2018 for creating a seamless brand experience across social media platform, making the best use of it to generate leads, revenues and for launching a product. Case study shows that flipkart must have hired the best digital marketing company who helped it for a successful business plan.
Flipkart ‘You’s Feed’
Every brand launches an annual sale, but Flipkart took hyper-personalisation a step ahead with a personalised customer feed called You’s Feed. This customer-oriented, algorithm-based and automated feed is user-based platform advertising, bringing you products that you might have referred to or has shown interest at some point. Its case study shows us various ways to look from the perspective of customers for a successful business relationships.
Moreover, Flipkart’s 360-degree view into ‘Look what Flipkart Delivered’ Storify page is an illustrative example of how to keep customers happy and how to flaunt it! It is also one of the very few brands that made use of even Google Plus while it lasted.
How flipkart utilized social Media success?
Flipkart does what everybody else is doing with Facebook. It features self-promotional posts, Q&A updates, current trends and topics. This is why there isn’t much to write home about except that it takes its customer service quite seriously. The team handles complaints quickly and appropriately and tries to resolve it ASAP. The custom tab for support works exceptionally well.
The special shout out goes to the graphic design team that creates a custom cover page for each occasion, topic and trend- aligned with Flipkart’s colour tonality and language.
While Flipkart Facebook page doesn’t stand out, its Twitter team is working beautifully to strike an informal and friendly conversation with users. It also has an exclusive handle to address the complaints and grievances of its customers. It uses social media tools and CRMs to listen in to their mention in the conversations. After the success over online and various digital platforms, many people have started learning digital marketing course in India.
YouTube
Who could forget the creative, witty and youthful theme of kids-turned-adult TVCs that is still such a massive hit with masses!
War of Words
Our case study also found some war of words between companies. The (in) famous war of words between Amazon and Flipkart fuelled by Reddit India! Here, have a look at how one needs to have one’s wits about on social media!
SEO Case Study about Flipkart
Flipkart uses SEO and Google Adwords to enhance its reach and drive organic traffic to its website. It also offers SEO services to its vendors and retailers to make their products more searchable and search-engine friendlier. It encourages reviews on its products and prompts users to provide reviews on the products they have purchased. The e-retailer has also invested in paid ad ranks, display ads and email marketing.
Content Marketing Case Study
Case study about its content marketing was as good as Paytm does. Flipkart’s content marketing strategy revolves around building stories and helping customers navigate through the online product catalogue and make an informed decision. There are product comparisons, reviews, recommendations, digital PR, ‘How To’ buying guides, guest blogging and so on to nudge the customers into finally go through the purchase. It focuses on ‘Content to Commerce’ and pushes several initiatives to make itself a one-stop knowledge repository.
The ‘Flipkart Stories’ is the platform that the brand is using its side of the stories to the customers. Available in regional languages, it is a channel where its representatives, from the top management to the riders pour their “heart” out. The team also travels through the villages and cities where Flipkart traversed across and left its digital footprints.
The e-retailers has also partnered with content platforms like TVF, ScoopWhoop, and Ping to push sponsored and creative programs.
Why did Flipkart run into losses despite such an earnest start and glorious run?
According to the experts and analysts, the strategy of luring customers based on discounting, and earning a bigger slice of market share can’t be sustainable for long. A startup or company offering a discount to attract customers and fence-sitters to purchase online eventually has to bear losses, and the brunt of cash burn on both sides. The depletion of cash burn also impacts GMV or Gross Market Value- the most important metric to analyse growth in the market. Making a case study about Flipkart helps us to understand the joy of success and learning from failures in a very dramatically way.
Once the blind race towards the goal of getting big names on the plaque as the investors and touch the magical number of billion-dollar valuation is over, a startup is left with the vast, high-end ecosystem that needs money to operate. And it isn’t merely a slowdown; it is akin to the faecal gravity where shit rolls downwards. India’s current FDI policies too don’t exactly do justice with a startup’s concern and operations. While the government wants them to refer themselves as marketplaces, a startup is handling everything, from a warehouse to logistics. Indian market is fragmented as well, and a marketplace model with a dedicated domain has never worked. So, the startups are lured into the trap of stock more and more inventory, leading to substantial operational costs.
Flipkart’s App Only Move
Flipkart’s ‘app only’ move was also way ahead of its time, and it failed to gain trust from its users timely. Besides, unlike Paytm, it was unable to introduce a digital wallet on time. Customers want to streamline their browsing and ease into their shopping experience, and with one-click payment of a digital wallet, it is easier than ever before. But the e-retailer was late to the party here!
Despite several ups and downs, Flipkart can’t be written off the charts yet. However, it needs to watch out its back as Amazon gradually is stepping up and is slowly penetrating even tier-3 cities with super-fast deliveries. The quality and excellent services have never been a concern with the e-com retailer. While the rest of the startup ecosystem is sticking with the good old tricks of the trade and not experimenting too much, Flipkart has been pushing the proverbial envelope for which Indian customers aren’t ready. Flipkart must have done this in his case study to follow the customer behaviors during difficult times.
For a company that has been hailed to the gold standard and has redefined the startup ecosystem, failing to execute its most-awaited event to the Big Billion Day doesn’t exactly evoke trust with the users. Besides, the ‘no cancellation, no refunds’ policy during the sales drive the customers away. And as an e-retailer, you can’t confuse your customers with every discount terms under the sun such as a maximum discount, big discounts, flat discounts and minimum discounts. Too many variables vying for the attention on the home page only dither the customers from making a decision.
Flipkart Made Many Bold Moves
While Flipkart’s digital marketing strategy has been on-point mostly, it of late, started to buy real estate on TV and print media for more visibility. It was a bold move, but its customers were never there, to begin with. Its home page seems to be cluttered with too many CTAs driving the customers away. Amazon, its arch-nemesis, on the other hand, finds many takers of its neat website and user interface. The Cash on Delivery, the one-of-its-kind payment mode initiated by the company to invoke trust and faith in the customers, was revoked and was offered on select postal codes, deterring the first-time customers from buying at the platform. Flipkart sellers also face distrust with the portal owing to its discount policy. The lack of a competent logistics network vis-à-vis Amazon is too eating into its share.
However, the situation isn’t as grim as it may look. Flipkart’s magical Bansal touch may have vanished, but its collective expertise and experience to deal with the Indian audience are as-is. Flipkart’s tackling of COVID-19 and quick solution in offering essentials to the cities is commendable. Though, the e-retailer should consider grasping its market share by winning the trust of its customers rather than the money.
As the great Frank Underwood in ‘House of Cards’explains,
“Money is the Mc-mansion in Sarasota that starts falling apart after ten years. Power is the old stone building that stands for centuries.”
References
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2960044
http://sdmimd.net/dimensions/issue/septoct2016/6_Flipkart.pdf
Winners bask in the glory of #SAMMIE2018 as Flipkart, Ola and more win big