140409-company profile flipkart priya goswami
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flipkart.comCOMPANY PROFILE
Table of Content
1. Analysis of Market Environment
2. Company Overview
3. Business Model Analysis
4. Success Factors
5. SWOT Analysis
6. Porter’s Five Forces Analysis
7. Conclusions
8. References
Analysis of Market Environment• India is one of the world’s leading emerging markets, growing at a rate of 6-7% even through an era
of global economic downturn.
• According to a survey conducted by Assocham, India's e-commerce market grew at a staggering
88% in 2013 to $ 16 billion, riding on booming online retail trends and defying slower economic
growth and spiralling inflation
• India has Internet base of around 150 million as of August, 2013 and this number is increasing day
by day facilitating the growth of the online retailing.
• It is estimated that in India, currently there are approximately 27 million active mobile internet users
and 4% are purchasing products via mobile internet which can go even 20% in coming years.
• India is a big market and increasing living standard and internet usage is a major driver for
development of e retail in India.
• Social networking sites like facebook, twitter, etc are playing a crucial role in influencing people for
buying products online. Many of the vendors are using that platform as strong tool for marketing as
well as sale.
• Among all the categories, Apparel and Accessories segment witnessed the highest growth in
previous years
Company Overview: flipkart.com
• Flipkart is one of the leading Indian e-commerce companies established in 2007
• The company has over 11 different categories, more than 2 million registered users and sale of 30,000 items a day
• Among the top 20 Indian Web sites in terms of traffic• At the beginning, Flipkart focused on online sales of
books but it later expanded to electronic goods and a variety of other products
• It raised funding from venture capital funds Accel India in 2009 and Tiger Global (US$10 million in 2010 and US$20 million in June 2011)
Headquarter Bangalore, Karnataka
Sales Turnover (2013) US $ 200 Million
Start Year 2007
Employees 4578 (aprox.)
Type of Site Online retail
Stand out point Flyte Digital Music Store
Company Introduction
Geographical Presence : Warehouses
Product Offerings
• CDs and DVDs• Mobile Phones &
Accessories• Cameras• Computers• Computer Accessories
And Peripherals
• Pens and Office Supplies
• Home Appliances• Kitchen Appliances• Personal Care Gadgets• Health Care Products• Clothing and Accessories
4
• Bangalore, Karnataka• Chennai, Tamil Nadu• Delhi• Kolkata, West Bengal
• Mumbai, Maharashtra
• Noida, Uttar Pradesh• Pune, Maharashtra• Kochi, Kerala
Acquisition of Letsbuy.com, India's second largest e-
retailer in electronics
Flipkart has bought the company for an estimated US$
25 million
Acquisition of WereadFlipkart acquired this social
book discovery tool for providing Flipkart a social
recommendation platform for buyers to make informed
decisions based on recommendations from
people within their social network
Acquisition of Mime360Flipkart acquired Mime 360 a
digital content platform company
Key Insights
• Increase internet usage in the country and people getting accustomed to making purchases online
• Flipkart was making operational losses on transactions of books that accounted for 65% of its sales volume and 40% of revenue.
Merger and Acquisitions
2010 2011
Acquisition of Chakpak.com, a Bollywood news site that
offers updates, news, photos and videos
Flipkart acquired the rights to Chakpak’s digital catalogue the company also mentioned that it will not be involved with the
original site and will not use the brand name
2011 2012
Company Overview: flipkart.com
2010 2011 2012 20130
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nue
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Business Model Analysis: flipkart.com• Flipkart believes that the inventory model is out of trend and the
concept of Marketplace Model is now the • An online marketplace is a type of e-commerce site where product as
well as the inventory information is provided to customer by multiple third parties, whereas transactions are processed by the marketplace operator.
• Under the Market Place Model, the company would not have its own inventory rather buyers can deal with sellers directly and the delivery will be done by Flipkart.
• The company has on-boarded 50 sellers that are selling in books, media, and consumer electronics categories. Clothes, shoes and other categories are expected to follow soon.
• The flipkart business model has following key points:‒ Users have COD/EMI options and return/replacement policies.‒ Flipkart takes care of shipping and doorstep delivery through its
logistics partners.‒ It is expected that there will be soon complaint resolving program
launched by Flipkart.‒ A good mass of online shoppers have an opinion that the user
experience that is product selection, customer service and logistics is very smooth with variety of products.
Buyer 1
Buyer 2
Buyer 3
Seller 2
Seller 3
Seller 1
Platform 1
Platform 2
Platform 3
B2B
Marketplace
Mul
tiple
Buy
ers t
o M
ultip
le S
elle
rs
Competitive Bidding- Auction, Exchange, Grouped Buying, reverse Auction
Success Factors: flipkart.com• First Mover Advantage
Flipkart enjoys the top-of-the-mind brand recall as far as buying books is
concerned. Other portals such as Uread and Dial-a-Book are still struggling to
register their presence into the consumer’s mind.
• Cash on DeliveryThis system simplified the online shopping as many people do not know how to
make payments online. People do not have immense trust in e-commerce also
got facilitated via this.
• Strong Marketing StrategyFlipkart has been mostly marketed by word of mouth advertising. Customer
satisfaction has been their best marketing medium. The company wisely used
SEO (Search Engine Optimization) and Google Ad-words as the marketing tools
to have a far reach in the online world
• Congenial PurchaseIts not necessary to register on the website for buying products. The website
allows a user to purchase products as guest visitor too.
• E-commerce BackgroundThe founders are ex-Amazon employees, hence they are bringing in the required
expertise and skillset needed to run and grow an ecommerce portal.
SWOT Analysis: flipkart.com
Strengths• Monetary assistance provided.• Domestic market presence.• Skilled workforce.• Strong distribution and sales network.• Variety of product offerings.• Two VC investment to build its own delivery system thereby
reduce delivery time.• Cash on delivery which helps in making 60% of the company’s
income• Innovation and technology competence.
Opportunities• Untapped mobile users• Coverage of all parts of India• Tie ups with Book fairs/education institutes.• Capturing untapped global markets• Self e-publishing
Weaknesses• No control over small value orders• Free shipping built costs• Less reach as compared to physical book stores.• Lack of global reach.• Competitive market• Lack of internet know how at many places in India
Threats• Small players are emerging as competitors• Small value orders in remote areas with high delivering costs• Major players like Amazon
• .
S W O T
Porters Five Forces Analysis: flipkart.comSupplier Power: Low
• Large supplier base• The readers are reducing thus
weakening the suppliers position
Barrier to Entry:
Low• High market
potential for this industry
• Low entry barriers, but sustaining is tough
Competitive RivalryMedium
• Many small players such as Snapdeal and Naaptol
• Entry of international giant such as Amazon in India
Buyer Power:High
• Presence of multiple players• Few number of online shoppers
Threat From Substitute:
Low• Traditional book
stores.• Advent of
electronic book readers such as I Pad and Kindle.
Conclusion• The company was funded by the owners themselves with Rs 400,000, Flipkart has since then
raised funding from venture capital funds Accel India in 2009 and Tiger Global (US$10 million in
2010 and US$20 million in June 2011)
• The company registered high growth in sales and number of website visitors
• Being a very new industry in Indian market almost every factor contributes to the key success of
an online book store.
• The company changed its business model in February 2013, moving from online retail to the
marketplace model, in which third parties use its platform to sell products to the customers.
• Flipkart India sold its technology platform and related intellectual properties to another entity
called Flipkart Internet Pvt. Ltd effective on 31 December 2012. The value of the sale of business to
Flipkart Internet was approximately Rs.94.15 crore, as suggested by its filings.
• The strong marketing strategy, variety of products, on time delivery, cash on delivery, etc factors
are the major factors behind the rapid growth of the flipkart.
• The operational loss was due to the investments the company was making in technology, supply
chain, logistics, customer support and marketing to scale up the business
References
• http://
www.thehindubusinessline.com/todays-paper/tp-new-manager/article2507045.ece
• http://www.sramanamitra.com/2010/10/04/building-indias-amazon-flipkart-ceo-sachin-b
ansal-part-1
/
• http://www.cxotoday.com/story/indian-e-commerce-market-grew-at-88/
• http://
www.academia.edu/4120009/E-COMMERCE_TRENDS_IN_THE_CURRENT_SCENARIO
• http://www.flipkart.com/about-us
• http://en.wikipedia.org/wiki/Flipkart
• http://swot.advisorgate.com/swot-f/14920-swot-analysis-flipkart-com.html
• http://www.deccanherald.com/content/190213/indian-e-commerce-firm-flipkart.html
• http://subscriber.hoovers.com/H/company360/overview.html?companyId=862603314
• Many others
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