Project Report on

E- COMMERCE MARKETING STRATEGY OF FLIPCART

In partial fulfillment of requirement for the

Award of Degree of M.Com

Subject:
MARKETING STRATEGY AND PLAN

Submitted By:
Mr.PradeepSureshSingh
Roll No. 27
M.Com. Part I, Semester - II

Under the Guidance of:

Prof. Mr. Prakash Mulchandani

SMT. CHANDIBAI HIMATHMAL MANSUKHANI COLLEGE

ULHASNAGAR 421003

UNIVERSITY OF MUMBAI
2014 2015

Thisistocertifythat,Mr.PradeepSinghofM.ComPartI,hassuccessfully
completedtheprojectinMarketingStrategyandPlantitledE- COMMERCE
MARKETING STRATEGY OF FLIPCARTundermyguidancefortheacademic
year201415.Theinformationsubmittedistrueandoriginalaspermyknowledge.

Mr.PrakashMulchandani
(InternalGuide)
Prof.GopiShamnani
(Coordinator,M.Com)

Dr.PadmaV.Deshmukh
(I/CPrincipal)

________________
ExternalExaminer

DECLARATION

I, Mr. Pradeep Singh student of SMT. CHANDIBAI HIMATMAL

MANSUKHANI COLLEGE, ULHASNAGAR studying in M.Com Part I,
Semester II, hereby declare that I have completed this project on ECOMMERCE MARKETING STRATEGY OF
FLIPCART for the subject
MarketingStrategies&Plans in the academic year 2014-15.The information
submitted is true and original to the best of my knowledge.

_______________
Mr.PradeepSingh

ACKNOWLEDGEMENT

The satisfaction, which accompanies the successful completion of the project, is incomplete
without the mention of a few names. We take this opportunity to acknowledge the efforts of the
many individuals who helped us make this project possible.
We would like to express our sincere gratitude to our Prof. PRAKASHMULCHANDANI
for giving us an opportunity to work under her esteemed guidance which helped us to improve
upon our lacunae during the project research. We are very grateful to her for providing us with
every possible opportunity & freedom to learn and explore. We are deeply indebted to her for her
suggestions, constant inspiration and encouragement.

EXECUTIVE SUMMARY

The concept of e-commerce is downloading at a fairly rapid pace in the psyche of the Indian
consumer. In the metros, shortage of time is a big driver for online shopping. On the other hand,
accessibility to a variety of products makes audiences from smaller towns and cities opt for the
online route. Major retailers face challenges in stocking their stores adequately. Often, customers
are unable to purchase items of their choice, thus prompting them to resort to e-retailers.
Flipkart has accorded a lot of importance in trust building exercise that is why it has a strong
Customer Support Team which helps the customers with the website guidance and resolving
issues.
Flipkart uses its in-house logistics (FKL) as well as third party logistics (3PL) services as the
logistics is one of the most important for a success of any ecommerce venture. Along with the
logistics, reverse logistics of Flipkart is also well developed with a 30 day return policy and
flipkart bearing courier charges for returned products.
Flipkart when it started employed the consignment model of procurement as it was the most risk
free way to operate but then they changed to Inventory model to ensure superior delivery times.
But with foreign direct investment (FDI) favoring the marketplace model in April2013, Flipkart
changed its business model to marketplace model.
WS Retail a pet project of Flipkart now handles the inventory and warehouse management.
Flipkart has continued to fare very well in terms of the delivery time because of their developed
supply chain management and dedicated customer support team to ensure customer delight. This
causes them to build a lot of slack into their existing systems causing higher costs at several
points in the supply chain. How they address this challenge is what will determine their future
success.

INDEX

Sr.N

Particulars

Page
No

Introduction

Funding

Acquisition

Market Overview

SWOT Analysis of Flipkart

Major Competitors

Market Segmentation

Market Positioning

Marketing Strategies

10

Summary

11

Bibliography

12

Thank you

INTRODUCTION

Things are easier said than done! To realize our dreams and that also in such a grand manner is
really a tough task. The founders of Flipkart have probably conquered their dreams with the
amazing success of Flipkart. Flipkart is something which has really opened up the Indian ecommerce market and that also in a big way.

Flipkart was co-founded by Sachin Bansal and Binny

Bansal in Oct 2007. Both are graduates from IIT-Delhi
and have prior work experience in Amazon.com They
both were solid coders and wanted to open a portal that
compared different e-commerce websites, but there were
hardly any such sites in India and they decided to give
birth to their own e-commerce venture - Flipkart.com
Thus was born Flipkart in Oct 2007 with an initial
investment of 4 lac (co-founders savings). It was never
going to be easy since India has bad past experiences with e-commerce trading. It was not an
easy segment to break into, people were very particular in paying money for something which
they had not seen and received. The trust was missing in the Indian customers. So what Flipkart
had to do was to instill trust and faith in their customers. And they did exactly the same, will
discuss more on how they did so later in the post.
Flipkart began with selling books, since books are easy to procure, target market which reads
books is in abundance, books provide more margin, are easy to pack and deliver, do not get
damaged in transit and most importantly books are not very expensive, so the amount of money a
customer has to spend to try out one's service for one time is very minimal. Flipkart sold only
books for the first two years.
Flipkart started with the consignment model (procurement based on demand) i.e. they had ties
with 2 distributors in Bangalore, whenever a customer ordered a book, they used to personally
procure the book from the dealer, pack the book in their office and then courier the same. In the
initial months the founder's personal cell numbers used to be the customer support numbers. So,
in the start they tried their best to provide good service, focus on the website - easy to browse
and order and hassle-free, and strove hard to resolve any customer issues. Since there were not
any established players in the market, this allowed them a lot of space to grow, and they did in
fact grew very rapidly.
Flipkart had a revenue of 4 crore in FY 2008 - 2009, 20 crore in FY 2009 - 2010, 75 crore in FY
2010 - 2011, and the revenue for FY 2011 - 2012 which ends on 31 Mar 2012 is expected to be
500 crore. This is indeed a massive growth. The company targets revenues of 5000 crore by
2015.

The company started from 2 employees and now has around 4500 employees.
Flipkart started with consignment model as discussed above, since most of the customer issues
like delivery delays etc. result from procurement model, the company started opening its own
warehouses as it started getting more investments. The company opened its first warehouse in
Bangalore and later on opened warehouses in Delhi, Kolkata and Mumbai. Today the company
works with more than 500 suppliers. As on date more than 80% orders of Flipkart are handled
via warehouses which help in quick and efficient service.
A humble beginning from books, Flipkart now has a gamut of products ranging from: Cell
phones, laptops, computers, cameras, games, music, audio players, TV's, healthcare products,
washing machines etc. etc. Still, Flipkart derives around 50% of its revenue from selling books
online. Flipkart is the Indian market leader in selling books both offline and online, it enjoys an
online share of around 80%. The electronic items have a large number of players like Naaptol,
Letsbuy, Indiaplaza, Tradus, Infibeam, Yebhi etc. The electronic market share is distributed
among them in different unknown proportions.
India has around 13.5 crore internet users today where as the number of homes with Cable and
Satellite (C&S) television is 10.5 crore. The expected internet users will reach a figure of 30
crore by 2014 and C&S homes are expected to be 14 crore by 2014. Thus India has a tremendous
internet growth and with the customers getting accustomed to e-commerce, the future of ecommerce sector is definitely rosy. An approximated 25 lac people have transacted online this
year, the number is all set to increase with time.
Also to mention most of the Flipkart customers use internet from PC's/Laptops to order goods.
The use of mobile internet is very less at the moment, but with the advent of smart phones the
use of mobile internet for e-commerce transactions will soar with time. India has 8 crore mobile
net users at the moment, the number is expected to swell to 22.5 crore by 2014.

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.

FUNDINGS

Initially funded by the Bansals themselves with 4 Lakhs(INR).

Flipkart has since then raised two rounds of funding from venture capital funds Accel
India (in 2009) and Tiger Global Management (up to the tune of US$10 million) (in
2010).

Private equity firms Carlyle and General Atlantic are in talks to jointly invest about $150
million to $200 million in Flipkart, according to sources.

In July 2013, Flipkart raised USD 160 million from private equity investors.

In October 2013, it was reported that Flipkart had raised an additional $160 million from
new

investors

Dragoneer

Investment

Group, Morgan

Stanley

Wealth

Management, Sofina SA and Vulcan Inc. with participation from existing investor Tiger
Global.

On 26 May 2014, Flipkart announced that it has raised $210 million from Yuri Milners
DST Global and its existing investors Tiger Global, Naspers and Iconiq Capital.

In early July 2014, it was also highly speculated that Flipkart was in negotiations to raise
at least $500 million, for a likely listing in the US for 2016.

On 29 July 2014, Flipkart announced that it raised $1 billion from Tiger Global
Management LLC, Accel Partners, and Morgan Stanley Investment Management and a
new investor Singapore sovereign-wealth fund GIC.

ACQUISITIONS

2010:

We Read, 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.

2014:
Acquired Myntra.com in an estimated INR 2,000 crore deal.

MARKET OVERVIEW
India has an internet user base of about 250.2 million as of June 2014. The penetration of ecommerce is low compared to markets like the United States and the United Kingdom but is

growing at a much faster rate with a

large number of new entrants. The
industry consensus is that growth is at
an inflection point.
Unique to India (and potentially to
other developing countries), cash on
delivery is a preferred payment method.
India has a vibrant cash economy as a
result of which 80% of Indian ecommerce tends to be Cash on Delivery. However, COD may harm e-commerce business in
India in the long run and there is a need to make a shift towards online payment mechanisms.
Similarly, direct imports constitute a large component of online sales. Demand for international
consumer products (including long-tail items) is growing much faster than in-country supply
from authorized distributors and e-commerce offerings.
India's e-commerce market was worth about $2.5 billion in 2009, it went up to $6.3 billion in
2011 and to $14 billion in 2012. About 75% of this is travel related (airline tickets, railway
tickets, hotel bookings, online mobile recharge etc.). Online Retailing comprises about 12.5%
($300 Million as of 2009) India has close to 10 million online shoppers and is growing at an
estimated 30% CAGR vis--vis a global growth rate of 810%. Electronics and Apparel are the
biggest categories in terms of sales.
Key drivers in Indian e-commerce are:

Increasing broadband Internet (growing at 20% MoM) and 3G penetration.

Rising standards of living and a burgeoning, upwardly mobile middle class with high
disposable incomes

Availability of much wider product range (including long tail and Direct Imports)
compared to what is available at brick and mortar retailers

Busy lifestyles, urban traffic congestion and lack of time for offline shopping

Lower prices compared to brick and mortar retail driven by disintermediation and
reduced inventory and real estate costs

Increased usage of online classified sites, with more consumer buying and selling secondhand goods

India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675 billion
by 2016 and $850 billion by 2020, estimated CAGR of 7%. According to Forrester, the ecommerce market in India is set to grow the fastest within the Asia-Pacific Region at a CAGR of
over 57% between 201216.
As per "India Goes Digital", a report by Avendus Capital, a leading Indian Investment Bank
specializing in digital media and technology sector, the Indian e-commerce market is estimated at
Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable portion
(87%) of this market today. Online travel market in India is expected to grow at a rate of 22%
over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-tailing
industry is estimated at Rs 3,600 crore (US$800 mn) in 2011 and estimated to grow to Rs 53,000
Crore ($11.8 billion) in 2015.
Overall e-commerce market is expected to reach Rs 1, 07,800 crores (US$24 billion) by the year
2015 with both online travel and e-tailing contributing equally. Another big segment in ecommerce is mobile/DTH recharge with nearly 1 million transactions daily by operator websites.

SWOT ANALYSIS OF FLIPKART

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 ( e.g. 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

MAJOR COMPETITIORS

Amazon.com

is

an

American

international

electronic

commerce

company with headquarters

in

Washington,

United States. It is the

Seattle,

world's

largest

internet

company, based on revenue

and number of employees.

Snapdeal.com is an online marketplace, headquartered in New Delhi, India. The company was
started by Kunal Bahl and Rohit Bansal, in February 2010.

eBay Inc., is an American multinational corporation and e-commerce company, providing

consumer-to-consumer sales services via Internet. It is headquartered in San Jose, California,
United States.

HomeShop18 is an online and on-air retail and distribution venture of Network 18 Group, India.
HomeShop18 was launched on 9 April 2008 as India's first 24-hour Home Shopping TV channel.

Yebhi.com is an Indian Online shopping E-commerce portal for Home, Lifestyle & Fashion eretailer, launched in the year 2009.

MARKET SEGMENTATION

The process of defining and subdividing a large homogenous market into clearly identifiable
segments having similar needs, wants, or demand characteristics. Its objective is to design a
marketing mix that precisely matches the expectations of customers in the targeted segment.
Few companies are big enough to supply the needs of an entire market; most must breakdown
the total demand into segments and choose those that the company is best equipped to handle.
The four basic market segmentation-strategies are based on

GEOGRAPHIC SEGMENTATION

CATERS TO TIER 1, TIER 2 AND TIER 3 CITIES

DEMOGRAPHIC SEGMENTATION

75% of online users between the age group of 15-34 years.

Flipkart targets mainly the youth of the country,

BEHAVIOURAL SEGMENTATION

Web friendly people.

PSYCHOGRAPHIC SEGMENTATION

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)

MARKET POSITIONING

An effort to influence consumer perception of a brand or product relative to the perception of

competing brands or products. Its objective is to occupy a clear, unique, and advantageous
position in the consumer's mind.

Points of parity:

Easy locating of products

Competitive prices.

No hassles of going to shops personally and shop for products

Availability of various products on one platform

Discount on purchases.

Home delivery

Gifting services

Cash on delivery

Availability of liquor

Flipifts

Academic related books

Points of Difference:

Flipkart membership cards for premium customers

Vernacular language

Better user interface-one drag approach

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 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

Product:
Aims most segments except automobiles and groceries.

Website is great, easy to use, easy to browse through theproducts, add products to wishlist
or

to

cart,

get

productreviews

and

opinions,

pre-order

products,

make

convenientpayments using different methods and better Search EngineOptimization.

Quality level of the products is absolutely fine E.g., If we take thequality of books
available in Crossword and Landmark is sameas the quality of books ordered by
Flipkart.com.

Products are packed in such a way that they are Tamper proof,weather proof and
breakage proof.

Product line on Flipkart.com have warranties as promised by thebrand of the product if

applicable. E.g., Bajaj MX 2 1200 WattsIron with 2 Years Bajaj India Warranty and extra
paid warranty forthe particular brand is available if applicable.

30-day replacement guarantee for faulty products. (Video for the same).
Product line is extensive one as discussed earlier. Derives around 50% of its revenue
from selling books online.

Flipkart as a brand has already differentiated itself as a pioneer in book retailer,

trustworthy in terms of swift services and secure payments, quality-oriented products
with lower price offerings than retail market), innovative product line, customer
delightful service which has helped them to form its own distinctive image better than
few unheard competitors such as Tradus.in and Indiaplaza.com.

Some unique product features of Flipkart.com such as

Wishlist

E-gift voucher

Flipkart launched a

new Electronic Wallet feature that allows shoppers to purchase credit to their Flipkart
account using creditor debit cards, and can subsequently be utilized to make purchases on
the site, as and when required.

Affiliate

Price

Price of the product taking account of various expenses such as Supplier expenses,
Transportation expenses, Packaging expenses, Shipping expenses, Courier expenses,
inventory maintenance expense, office and stationery expenses, sales and advertisement
expenses, taxes, depreciation, discount allowances and many more expenses.

Roughly about 5-7% profit per book orders which indicates that generation of revenue is
on volume basis.

Differentiated themselves by giving best selections, best services at lowest best possible
prices. (Video for the same)

Discounts up to 35% across all categories.

Upper edge in competitive pricing.

Place

Channel type: Words of mouth (if we can say that) which has been key driver for their
growth.

When an order is placed they either serve the order from their inventory or procure the
book on demand from various suppliers and then deliver the customer.

As on date more than 80% orders of Flipkart are handled via warehouses which help in
quick and efficient service.

We deliver orders in 1 day in Tier-I cities and 2-3 days in Tier II cities and 3-5 days Tier
III cities

Shipping and Courier would act as intermediaries in this process.

Delivery services through e-kart and postal services

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

Warehouses are located in the following cities, often near airports

Bangalore
Chennai
Delhi
Hyderabad
Mumbai
Noida
Pune

 Kolkata

Promotions -

Employees of divisions like Website, Business Planning and Analytics,

ERP, Business Development, Product Managementand Marketing,

Supply-Chain

Management

and CustomerSupport

are

generating

revenue for it.

Selection Criteria at Flipkart:-While years of experience arealways

beneficial for a candidate, Flipkart's focus is to hire thosewho are able
to consistently raise the bar and introduce a varietyof innovation to
move this organization forward. As Flipkart grows, we feel it is
absolutely necessary that our employees arealso able to grow
professionally with the organization.

Adequate Training as per their roles and responsibilities is given to

them accordingly and incentives.

Telephone Sales force is only 2% of the total employees focusing to

reduce the unsold/goods not much in demand.

Majority of Flipkart are employed in Customer support division.

It is the only customer support division in India having 24x7customer
support functioning for issues such as regarding choice of the product
to purchase, shipping, courier, how to order on website, mode of
payment, gift voucher, order status &cancellation and returns.

Having even tie up with Skype for the same on the website for user
delight.

Unique tool of Sales Promotion is Affiliate on their website.

Publicity is by words of mouth publicity generating trust and

accountability to users.

As

internet/web

strategy

used

Google

Ad-words,

blogs,

networking sites such as

twitter, facebook, used Google ad-words, e-mail campaigns.

social

Advertising focused on first Words of mouth from 2007-10 as the

advertisement cost was not affordable

Focused on Print and TVC from 2011 onwards.

Launched their first campaign in tvc on 05/05/2011 with the concept of

Granny, Mouse, Magic Presenting the Concept of Getting Books
Delivered at Doorsteps at just one click of The Mouse through a FairyTale.

Launched their second campaign No kidding. No worries that we are

serious about our promises we make and experience shopping safely,
delightfully and with ease.

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.

CONCLUSION

A credible rival can do wonders to an enterprise and Flipkart is no different. The entry of
Amazon in India has enabled Flipkart develop a lot of in-house innovation and organically
developed best-practices - that have now become the industry standard.
Flipkart began operations on the consignment model; goods were procured from suppliers on
demand, based on the orders received through the website. Later, the books-to-electronics e-shop
adopted the warehouse model. The company had its own warehouses, and maintained its own
inventory. However in July 2013, Flipkart launched its model of marketplace just one month
after Amazon launched its marketplace in India.
It introduced payments brand PayZippy for online merchants and customers seeking fast, hasslefree and safe payment options. Some 70 per cent of its shipments are done by its own logistics
company and about half of deliveries are on a cash-on-delivery basis.

Flipkart has recently introduced the next day guarantee delivery service and shopping from its
own mobile application. Given the critical mass of transactions Flipkart controls - about 100,000
a day - the company is betting that it has the volumes to lay the foundation of what will be a
profitable business.
Last but not the least; Flipkart has very clearly prioritized customer delight as its chief avenue for
customer acquisition and retention. This causes them to build a lot of slack into their existing
systems causing higher costs at several points in the supply chain. How they address this
challenge is what will determine their future success.

BIBLIOGRAPHY

www.flipkart.com
www.thehindu.com/features/magazine/the-flipkart.../article3290735.ece
http://articles.economictimes.indiatimes.com/2013-10-15/news/43068552_1_marketplacesflipkart-online
http://academic.reportlinker.com/d012905924/The-Indian-E-commerce-Industry.html
www.startupdunia.com/interview-with-flipkart-founder-binny-bansal-776
www.facebook.com/flipkart
www.hindustantimes.com/technology/industrytrend/how-flipkart-broke-indias-online-shoppinginertia/so-article1-780440.aspx