INTERNET MARKETING AND E-TAILING

GROUP PROJECT PART-1

Submitted to:

Submitted by:

Prof. Nimit Gupta

Abhishek Pramanik (PGFA1103)

Aamukta (PGFA1101)
Jyoti Anand (PGFA1121)
Reema Srivastav (PGFB1137)
Sameer Vivian Joseph (PGFB1139)

Table of contents

Introduction ......................................................................................................................................3
About ................................................................................................................................................4

Funding ........................................................................................................................................ 4

Acquisitions .................................................................................................................................. 5

Business Results ........................................................................................................................... 6

Locations ...................................................................................................................................... 6

Cash on delivery ........................................................................................................................... 6

COD Target ................................................................................................................................... 6

3 pillars ......................................................................................................................................... 6

USP ............................................................................................................................................... 7

Customers .................................................................................................................................... 7

STP................................................................................................................................................ 7

Positioning: .................................................................................................................................. 7

Marketing Strategies:................................................................................................................... 7

Poters 5 forces ............................................................................................................................. 8

SWOT : ......................................................................................................................................... 9

7 Ps of marketing ........................................................................................................................ 9

Market Share .......................................................................................................................................... 11

Competitors Analysis ............................................................................................................................. 13

Introduction
Flipkart is an Indian e-commerce company headquartered in Bangalore,
Karnataka. Its being touted as Indias answer to Amazon. Founded by Sachin
Bansal and Binny Bansal (not related to each other) in Oct 2007, Flipkart has
catapulted to one of Indias most popular e-commerce sites and undoubtedly as
the most popular online destination for books within a short span of three years.

About
Flipkart was established in 2007 by Sachin Bansal and Binny Bansal, both alumni of the Indian
Institute of Technology Delhi. They worked for Amazon.com before quitting and finding their
own company. Initially they used word of mouth marketing to popularize their company. A few
months later, the company sold its first book on flipkart.com - John Woods' Leaving Microsoft
to Change the World. Today, as per Alexa traffic rankings, Flipkart is among the top 30 Indian
web sites and has been credited with being India's largest online bookseller with over 11 million
titles on offer. Flipkart broke even in March 2010 and claims to have had at least 100% growth
every quarter since its founding. The store started with selling books and in 2010 branched out
to selling CDs, DVDs, mobile phones & accessories, cameras, computers, computer accessories
and peripherals, pens & office supplies, other electronic items such as home appliances, kitchen
appliances, personal care gadgets, health care products etc.
Interesting Statistics about the company

As of today, Flipkart employs over 4500 people

It experiences 2 million unit sales and 4 million unique visitors per month with sales
growing at 25% per month, eyeing a $50 million run rate

With close to 11.5 million titles, Flipkart is the largest online book retailer in India with
80 per cent market share

It has a registered user base of two million customers and ships out as many as 30,000
items a day, clocking daily sales of Rs 2.5 crore

Flipkart is rapidly expanding its network of warehouses, distribution centers,

procurement operations and 24/7 customer support teams. The company even has its
own delivery network in 27 cities and is set to expand this even further by next year

What sets it apart?

With path-breaking features like Cash/Card on Delivery, 30 Day replacement policy and EMI
options, Flipkart has now made it possible for anyone across the country with internet access to
shop online. The Flipkart experience is characterized by the intuitive user .

Funding
The company was initially self-funded, with co-founders Sachin and Binny Bansal spending Rs
400,000 ($9056) to setup the business. They later raised two rounds of funding from Accel
Partners and Tiger Global Management to the tune of $31 million, with the first round being
around $10 million and the second round being $20 million.

Acquisitions
2010
WeRead, a social book discovery tool. The stated goal was to give Flipkart a social
recommendation platform for buyers to make informed decisions based on recommendations
from people within their social network.
2011
Mime360, a digital content platform company.
2011
Chakpak.com is a Bollywood news site that offers updates, news, photos and videos. Flipkart
acquired the rights to Chakpaks digital catalogue which includes 40,000 filmographies, 10,000
movies and close to 50,000 ratings. Flipkart has categorically said that it will not be involved
with the original site and will not use the brand name.
2012
Letbuy.com is Indias second largest E-retailer in electronics. Flipkart bought the company for
an estimated US$ 25 million.

Business Results
Flipkart's reported sales were 4 Crore in FY 2008-2009, 20 Crore in FY 2009-2010 and 75 Crore for FY
2010-2011. In FY 2011-2012, Flipkart is set to cross the 500 Crore (US$ 100 million) mark as Internet
usage in the country increases and people get accustomed to making purchases online. On average,
Flipkart sells nearly 20 products per minute and is aiming at generating a revenue of 5000 Crore (US$ 1
billion) by 2015.

Locations
The company's headquarters is located in Bangalore's Koramangala neighbourhood. Flipkart has offices,
warehouses and customer service centres across India. Warehouses are located in the following cities,
often near airports.

Bangalore, Karnataka

Chennai, Tamil Nadu

Delhi

Kolkata, West Bengal

Mumbai, Maharashtra

Noida, Uttar Pradesh

Pune, Maharashtra

Kochi, Kerala

Cash on delivery

The COD should be more than 50K

EMI min 4K period is 3 or 6 months
If in 72 hours the rate decreases then the extra money will be paid back

COD Target

Students / people with no debit and credit cards

Geographically small town people

3 pillars

Website to get queries and orders

Suppliers book distributor
Logistics courier service tie ups

USP

Usability
Support

Model is partnership with local book vendors

Customers

Price sensitive
Experimental shoppers

Trust is the most need full thus their first product was books cheap and easy to delivery.

STP
Segmentation:

All internet users and shoppers

Target:

Flipkart concentrates on more Psychographic, which helps in deciding where to display

ads online
They target online shoppers and people who dont online shop (thus TVC to encourage
them)

Positioning:

Customer delight (low price, free shipping, replacement of faulty products)

No kidding no worries
Online megastore
One stop solution

Marketing Strategies:

Word of mouth (initial marketing even now they want to satisfy customer so they come
back for more)
Good use of SEO
We DONOT sell old books or used books. All the books listed at Flipkart.com are new
books. The books listed at Flipkart.com are NOT available for free download in ebook or
PDF format
Thus when you search free ebooks or pdf books old or used books flipkart will be
displayed.
Good use of SEM
Ads at proper places and use pay per click to pay for ads

Very easy web interface

Payment convenience
Cash/card on delivery there by encouraging students and people with no
credit/debit card to purchase in flipkart, with mobile internet penetration there is
chances of capturing rural market (60% revenue by COD)
EMI two types of installments (3 / 6 months) there by targeting price sensitive
customers
Wallet customer can recharge money online and purchase then and when needed
those entering details always is rectified, target heavy purchase and luxury customer
Customer conversion rate is so high more than 70%
Personalization of the user page
Product recommendation with your previous purchases

Poters 5 forces
Bargain power of suppliers (low)

The readers are reducing thus suppliers are in weak position

Inventory turnover is lower, thus more inventory again flipkart is at the upper hand

Bargain of buyers (high)

Not many buyers

Best deals online
Cash on delivery
One stop solution
Faster delivery with free shipping cost

Threat of New entries (high)

Market potential for this industry is high

Low entry barriers, but sustaining is tough

Threat of substitutes (Low)

Diminishing brick and mortar model

Increasing customer ease and customer satisfaction

Industry rivals (Medium)

Many small players (snapdeal, naaptol ..)

Entry of international players like Amazon into India

SWOT :
Strength

Top Indian ecommerce portal

Diversified into electronic goods
Two VC investment to build its own delivery system thereby reduce delivery time
Cash on delivery which is making 60% of its income

Weakness

Coordination with suppliers and courier was tough

Price biasing to maintain the margins ( eg. Low price for the best seller book and more
price for the least wanted)
24/7 customer care, thus even mid night is to delivered within 24 hours

Opportunities

Already working towards customer delight will obtain customer loyalty gradually
Supplier database interface with flipkart website for JIT procurement
Mobile internet usage is increasing there by chances of increase in sales through mobile
shopping.

Threats:

Small players and emerging competitor

Major players like Amazon
In capabilities to manage certain costs like delivery cost, bank charges

7 Ps of marketing
Product :

Appearance the ease in the website interface even for the first visitor
Quality checking of the product before packing (visual test)
Packing different packing(eg. Bubble pack for electronic items)
Brands all brands integrated in one website
Warranty one year warranty from the manufacturers side
Service & support guarantee delivery of undamaged product or else replacement in 30
days.

Price:

Special discount
As shipping is within India the shipping cost reduces
Seasonal discounts
Free shipping
For expensive products transit cost is borne by company

Place:

Tie ups with local vendors and courier firms (thereby avoiding octroi charges)
Company owned warehouse in major cities near airport
Trying to achieve minimum returns
If the courier cant delivery to the location the product is shipped through government
post

Promotion:

SEO and SEM

Word of mouth marketing
TVC lately to encourage non-online shoppers
More online marketing like FB, Twitter, linkedin
Hiring people with high sense of ownership, generalist with more attitude to learn

Packaging:

Different packaging for different product to ensure safe delivery

Flipkart the name goes with the online cart
Design and packaging is common so customers can relate it to the company

Positioning:

Customers feel Flipkart is cheap, on time delivery, replacement; the online myth is
gradually eradicated
Competitors see Flipkart as the market leader, with the acquisition of letsbuy.com
General public want to try it once for its creative TVC is making people curious to
experience flipkart.

People:

Service people, Sales Clerks, Delivery drivers, Managers, Complaints department,

Accounting, Warranty people, Technical people, all work for the customer ease,
customer satisfaction and customer delight.

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Market Share
Retail category penetration has increased to 60% reach and has grown to 37.5 million unique visitors
a month, an overall growth of 43% annually. The growth has come across all retail categories and most
of them show promising transactions and conversion rates along with growth in visitors. The top retail
sites shown above in India have each seen a growth of over 100% in the last 12 months.

Amazon is the most visited retail site with most of the traffic slipt among Amazon.com, ImDB and
Junglee.com.
Flipkart leads the way among the online retailers in India with 7.4 million unique visitors a
month,growing at 431% annually. Snapdeal has been close second with 6.9 million uniques. Jabong and
Myntra have been competing closely in the lifestlye category with over 5.3 million uniques each.
HomeShop18 has over 4 million uniques a month.

Apparel has been the

fastestgrowing
subcategory in retail and
reaches 13.4% online users
i n I n d i a . Comparison
shopping, as research of
retail online grows continue
to dominate. Most of the

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comparison shopping sites show a growth over 75% Y-o-Y and will continue to grow as more
categories of retail come online. Travel category has shown this trend with high overlap among
OTAs and this trend is expected among online retailers as well.
Consumer goods, sports/outdoor products and retail food sub categories have also shown early
growth signs. Consumer goods being a popular category among horizontal retailers is still way
below global averages.
Flowers/gifts/greetings is the only subcategory which has shown de-growth of over 33% in the
last 12 months.
Vertical e-Commerce categories including baby products, apparel, shoes and other lifestyle
categories have also shown tremendous growth. Wider assortment and product availability
have helped these retailers in growing business online.
More retailers online have heavily depended on online marketing to scale. The online
marketing spends across all content categories and effective marketing campaigns reaching out
the right target audience have increased visitation and hence conversion among retailers.
The average transaction sizes among some of the top retailers are as below:

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Competitors Analysis

Ecommerce India and Google Trends

(Graph from Google Trends: Interesting tit-bit try region as India & watch for the tricks from
Flipkart & Infibeam in 2009)
Now watch carefully for the patterns.

Infibeam is flat.
Infibeam and Myntra arent growing enough compared to their competitors.
Myntra had some traffic back in 2010 and went flat for next 1.5 years.
Flipkart did its rocketing in Oct 2012 when they started advertising on TV and then on a good
upward projectile.
Flipkart grew rapidly in 2011 traffic peaked from Oct 2011 till April 2012 [The Panda raid].
If you looked at India only growth Flipkart probably got significant India traffic only with TV
ads & not before.
The most gaping fact of the entire graph - Jabong got all the traffic that flipkart took 6 months
to build from TV in the last 2 months.

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The TV ad is great. Indians love drama, dont we? And that has probably got more likes and
mental note than the creative & cheerful ads of flipkart (they were cute but still not there yet
for India). Sadly enough, Myntra hasnt been able to get even a small bump in its traffic all
these days with Crores poured into TV campaign.
So was it the awesome TV ad? Of course not. As someone rightly commented on pluggd.in post
its probably the effect of aggressive email marketing (call it spam). There are many others
who have done that in India fashionandyou, crazeal etc.
Either way, today, Jabong leads in the market share of visitors in retail ecommerce.
What are the other Internet sites who advertise on TV? All the listing sites so let us see where
they stand olx, quickr, sulekha.. You will be in for a surprise.

Classified vs. Ecommerce Traffic in India

Quikr.com has almost double the traffic as OLX.in and even Flipkart.com
If you check the estimates from Google Ad Planner (which are actually very close to real
numbers from what I know) quickr has 9% penetration in India while Flipkart has 4.3%
So all the listing sites are quite ahead of Flipkart & Jabong in capturing visitors. Want to know
who the big guy is it isnt any of the travel portals or songs.pk and not even espncricinfo.com
with all the IPL heat!

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Babylon: The Real Slim Shady of India Internet?

Babylon.com the translation software!
Now, of course thats shady. It is a whopping 12% of India traffic as reported by Google. Any
marketers in the readers would now connect why Babylon.com is the 2nd or 3rd popular source
in their Organic Traffic in analytics

Source:

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