Subhamsharaffflipkart 190214071150
Subhamsharaffflipkart 190214071150
ON
CERTIFICATE
Signature:
Date: (Sri. Asis Kumar sahu)
Place: BERHAMPUR
T. SUBHAM SHARAFF
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DECLARATION
I hereby declare that the Project Work with the title “MARKETING
ANALYSIS ON FLIPKART” submitted by me under the guidance of Sri. Asis
Kumar Sahu for the partial fulfilment of the degree of B.Com. Honours in
Accounting & Finance under the KHALLIKOTE UNIVERSITY is my original
work and has not been submitted earlier to any other University
/Institution for the fulfilment of the requirement for any course of study.
I also declare that no chapter of this manuscript in whole or in part has
been incorporated in this report from any earlier work done by others or
by me. However, extracts of any literature which has been used for this
report has been duly acknowledged providing details of such literature
in the references.
Signature:
Name: T. Subham Sharaff
Registration No.:
Place: BERHAMPUR
Date:
T. SUBHAM SHARAFF
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ACKNOWLEGEMENT
T. Subham Sharaff
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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.
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.
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CONTENTS:- Page
CHAPTER 1 INTRODUCTION:- 7
1. Introduction of Company
2. Importance of Study
3. Scope of Study
4. Research Methodology
5. Limitations
1. Finance
2. Acquisitions
3. Awards and Recognitions
4. In House Products
1. Market Overview
2. SWOT Analysis
3. Major Competitors
4. Market Segmentations
5. Market positioning
6. Poter’s 5 Factors
7. Flipkart PLUS
8. Future Road Map
1. Introduction
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1. Flipkart + Walmart
2. Vision
3. Mission
4. Market Position
5. More about Flipkart
Suggestions: 45
Conclusion: 46
Questionnaire: 47
Bibliography: 50
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CHAPTER 1
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 e-commerce 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.
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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.
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.
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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.
Importance of Study
Scope of Study:
This study examines the success of Flipkart.com in utilizing 4P’s of products and
services to satisfy its online customers. It also focuses on the techniques of
Segmentation, Targeting and Positioning (STP) by online marketers in India.
The research was conducted to know the various factors of services offers by
Flipkart which affected the satisfaction level of customers and to measure the
availability of Products at the Web Portal of Flipkart.
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Descriptive research is also called Statistical Research. The main goal of this type
of research is to describe the data and characteristics about what is being studied.
The idea behind this type of research is to study frequencies, averages, and other
statistical calculations. Although this research is highly accurate, it does not gather
the causes behind a situation. Descriptive research is mainly done when a
researcher wants to gain a better understanding of a topic for example, a frozen
ready meals company learns that there is a growing demand for fresh ready meals
but does not know much about the area of fresh food and so has to carry out
research in order to gain a better understanding. It is quantitative and uses surveys
and panels and also the use of probability sampling. Descriptive research is the
exploration of the existing certain phenomena. The details of the facts won’t be
known. The existing phenomena facts are not known to the persons.
Limitation of Study:
Almost attention was taken to eliminate any kind of biasness & misinterpretation
in the study to get optimum result, even though the following limitations could
have certain degree of impact on the findings.
➢ The study was confined to Delhi region only which may not represent the
real picture of the entire Delhi.
➢ Many Delivery Boys were not interested to participate in this research
study.
➢ Data collected about satisfaction & awareness level may not represent
the real picture.
➢ My Study is confined only 100 respondents.
➢ Lack of the research experience.
➢ The major problem is to find out the consumers of Flipkart as my study is
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to find out the satisfaction level of the services provides by Flipkart to its’
consumers.
➢ Many consumers were also not get ready to participate in the research
study.
• 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.
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CHAPTER 2
Company Profile:
Finance:
Initially, the founders had spent 400,000 only for making website to set up the
business. Flipkart has later raised funding from venture capital funds Accel
India (US$1 million in 2009) and Tiger Global (US$10 million in 2010 and US$20
million in June 2011).
On 24 August 2012, Flipkart announced the completion of its 4th round of $150
million funding from MIH (part of Naspers Group) and ICONIQ Capital. The
company announced, on 10 July 2013, that it has raised an additional $200 million
from existing investors including Tiger Global,Naspers, Accel Partners and Iconiq
Capital.
On November 2012, Flipkart became one of the companies being probed for
alleged violations of FDI regulations of the Foreign Exchange Management Act,
1999.
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 Milner’s 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.
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On 29 July 2014, Flipkart announced that it raised $1 billion from Tiger Global
Management LLC, Accel Partners, and Morgan Stanley Investment Management
and a new investor Singapore sovereign-wealth fund GIC.
ACQUISITIONS
2010:
WeRead, a social book discovery tool. The stated goal was to give Flipkart a social
recommendation platform for buyers to make informed decisions based on
recommendations from people within their social network.
2011:
Mime360, a digital content platform company.
2011:
Chakpak.com is a Bollywood news site that offers updates, news,photos and
videos. Flipkart acquired the rights to Chakpak‘s digital catalogue which includes
40,000 filmographies, 10,000 movies and close to 50,000 ratings. Flipkart has
categorically said that it will not be involved with the original site and will not use
the brand name.
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2012:
Letbuy.com is India‘s second largest E-retailer in electronics. Flipkart
bought the company for an estimated US$ 25 million.
2014:
Acquired Myntra.com in an estimated INR 2,000 crore deal.
• Flipkart.com was awarded Young Turk of the Year at CNBC TV 18's 'India
Business Leader Awards 2012' (IBLA).
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• In July 2014 Flipkart launched its own set of tablet, mobile phones
& Phablet. The first among these series of tablet phones was Digiflip Pro
XT 712 Tablet.
• In July 2014 Flipkart launched its first networking router, under its own
brand name named DigiFlip WR001 300 Mbit/s Wireless N Router.
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CHAPTER 3
Market Strategies of Flipkart:
MARKET OVERVIEW
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-à-vis a global
growth rate of 8–10%. Electronics and Apparel are the biggest categories in terms
of sales.
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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 2012–16.
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.
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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
➢ Industry condition: very high potential
➢ Investor‘s trust
➢ Services and warehousing
➢ Payment options
➢ Established brand
Weakness:
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Opportunities:
Threats:
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MAJOR COMPETITIORS
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Yebhi.com is an Indian Online shopping E-commerce portal for Home, Lifestyle &
Fashion e-retailer, 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.
GEOGRAPHIC SEGMENTATION –
DEMOGRAPHIC SEGMENTATION –
BEHAVIOURAL SEGMENTATION –
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PSYCHOGRAPHIC SEGMENTATION –
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:
Points of Difference:
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MARKETING STRATEGIES
• Word of mouth (initial marketing even now they want to satisfy customer
so they come back for more)
• “We DO NOT 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 e-book or PDF format”
• Thus when you search free e-books or pdf books old or used books flipkart
will be displayed.
• Ads at proper places and use pay per click to pay for ads
• Payment convenience
• Wallet – customer can recharge money online and purchase then and when
needed those entering details always is rectified, target heavy purchase and
luxury customer
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Poter’s 5 forces
➢ The readers are reducing thus suppliers are in weak position Inventory
turnover is lower, thus more inventory again flipkart is at the upper hand
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Flipkart- 4’Ps
Product:
• Website is great, easy to use, easy to browse through the products, add
products to wishlist or to a cart, get product reviews and opinions, pre-order
products, make convenient payments using different methods and better
Search Engine Optimization.
• Quality level of the products is absolutely fine E.g., If we take the quality of
books available in Crossword and Landmark is same as 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.
• 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.
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PRICE:
• Roughly about 5-7% profit per book orders which indicates that generation
of revenue is on volume basis.
• As shipping is within India the shipping cost reduces, which indirectly reduces
the overall cost for the company and thus company offers less price as
compared to other players.
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• Pricing would always differ if you are buying from e-commerce sites and
Shopping Malls, reason for that is the middleman charges and the cost of
store which increases the price of the particular product.
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.
• Tie ups with local vendors and courier firms (thereby avoiding octroi
charges)
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• If the courier can‘t delivery to the location the product is shipped through
government post.
➢ Bangalore
➢ Chennai
➢ Delhi
➢ Hyderabad
➢ Mumbai
➢ Noida
➢ Pune
➢ Kolkata.
PROMOTIONS:
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• Having even tie up with Skype for the same on the website for user delight.
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If you have accumulated over 50 coins and become a member of Flipkart Plus, then
these are the others rewards you will get:
In addition to having access to free and fast delivery and early access to sales,
Flipkart Plus is also offering some more cool advantages that extend beyond the
website/app itself.
PEOPLE:
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• Investors,
• Employees schemes.
✓ They will look at bigger investments in their supply chain and technology.
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CHAPTER 4
Operations Team
Operations team deals with all the supply chain aspects of the company right
from procurement and warehouse management till customer support. The team
support the customers both online via telephone as well as offline via email.
Logistics
Logistics is one of the most important facets of any successful ecommerce venture.
Flipkart ships more than 100000 items a day which makes management of the
logistics a cumbersome task for the company. Furthermore, the cost of the delivery
is born by the company itself making logistics a financially complex issue also.
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Hence in order to successfully manage logistics. Flipkart uses its in-house logistics
known as „eKart‟ (EKL).
The e-commerce company created eKart as a separate brand to serve WS- Retail,
the B2C side of Flipkart, in April 2013 and currently reaches consumers in about
150 cities. eKart currently offers services such as delivery logistics, reverse logistics
and pay on delivery. It also offers customer support and technology integration for
order tracking, customer notifications, reporting and analysis, billing etc. In March
2014, Flipkart began to deliver packages for its competitors, as the company's
logistics arm; eKart Logistics opens services for other e-tail ventures.
While more than 90% of the Cash on delivery (COD) shipments and about 60-70%
of the overall shipments are delivered by the EKL the rest of shipments are catered
by 3PL service providers. Moreover, if there are more than 100 deliveries for a
particular destination the company uses EKL. In case of EKL, the shipment is first
transported to Mother hub and then to delivery hub and subsequently from
delivery hub the last mile delivery is done using suitable mode of transport such as
two-wheelers, bicycles, or on foot. The company has tie-ups with more than 15
courier companies like Blue Dart, First Flight etc. to deliver their products and
Indian post for areas where couriers do not reach. And to manage the 3PL providers
efficiently the company allocates time slots to different logistics partners and they
can pick up deliveries on specified time slots only.
Developing its in house logistics has helped Flipkart save commissions‟ worth than
2% that would have been otherwise paid to courier firms. It is also easily able to
accept cash on delivery, which make up about 60 percent of its orders. It can also
track packages more accurately. And because labour costs are relatively low in
India, its delivery cost is a modest ₹65 a package.
For delivering the items the logistics service among the three is decided based on
the area where the item needs to be delivered as well as product type and payment
method. EKL is presently available in major tier 1 cities including metros only. The
company uses India Post only in case if the shipment location is not serviced by any
of the 3PL as well as EKL primarily because of the higher delivery time. Moreover,
India Post orders are of prepaid nature only. The delivery time varies between 3
days to 3 weeks depending on the location and availability of the product.
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For example imported products take about 3 weeks‟ time to get delivered to the
customers whereas if product is available in local warehouse it gets deliver within
3 days. The mode of transportation is also dependent on the location. For example,
the inter-city, trans-zone deliveries are made using air cargo whereas satellite cities
and others in close proximity; products are transported overnight by train or truck.
For the local parts of the cities where the warehouses of the company exist
products are delivered using two-wheelers, bicycles, or on foot depending upon
the proximity of the place.
For example there have been several incidents when a customer buys a book only
to read it and then return it within 30 days. Similar incidents have been observed
with mobile phones as well.
Flipkart, through its data management systems, has tried to identify such frauds.
Return of a product to Flipkart can happen if the 3rd party cannot deliver to the
address or the customer does not accept the product. Some orders are cancelled
while the delivery is being processes by the courier company. Such orders are not
recalled but delivered to the address and then cancelled. Customers can call the
customer support and courier back the product to Flipkart.The delivery cost is
borne by Flipkart.
When a customer requests return of a product, there are 3 paths this request can
take:
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2. Store credit: If the customer is not satisfied with the product, he or she is
given store credit of the same amount.
Procurement
When Flipkart started its operations, they had employed the consignment model
of procurement. In this model, the retailer (in this case Flipkart) holds the inventory
owned by the supplier and buys it from the supplier only when it is sold to the end
consumer. Since the channel was new and unproven, this was the most risk-free
way to operate. Later this was discontinued and inventory was purchased to ensure
superior delivery times and customer satisfaction. But with foreign direct
investment (FDI) favouring the marketplace model in April 2013, Flipkart changed
its business model to marketplace model.
With a marketplace model, Flipkart no longer has an inventory of its own, rather
buyers can deal with sellers directly and the delivery will be done by Flipkart. The
model is similar to eBay India and Amazon.in At present, the entire inventory of
Flipkart is being managed by WS Retail which is flipkart‟s pet project. While WS
Retail will continue to be one of the sellers, Flipkart has added more than 50 sellers
to its list.
Inventory: These items are pre-ordered based on previous sales data to stock as
inventory. This category includes items with relatively low demand elasticity, fast
selling items and items with relatively long shelf life.
Just in-time: Items procured just-in-time are used to serve immediate outstanding
orders. Items with low or unpredictable demand are typically procured on an order-
to-order basis. Just-in-time procurement is also used for expensive items or
products that have seen slow sales growth.
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As of now, the number of orders served from the inventory is roughly 75%, with
25% orders being served by procuring just-in-time. Procuring just-in-time is
comparatively more expensive as the volumes for such orders are low, and the
supplier discount offered therefore is considerably lower. However when ordering
for inventory, bulk purchase is made and hence a much better price is realised.
Therefore the company would ideally like to move to a ratio of 9:1 ratio of orders
served through inventory to those procured just-in-time.
Each regional procurement team has a network of local suppliers for made-to-stock
as well as on on-demand (Just in-time) procurement. They also have visibility of the
stock for different SKUs with these suppliers, as last updated on the procurement
teams system by these suppliers. From Flipkart’s perspective:
Stock out: Defined as when the product is unavailable in the inventory (held in
warehouses) as well as Flipkart‟s suppliers (as last updated) The central
procurement team has visibility of all the regional procurement teams‟ views, and
therefore can monitor the stock levels for their suppliers all over the country. The
central team’s focus is on bigger suppliers with a country-wide reach.
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Flipkart has 7 major warehouses spread across the country in Mumbai, Kolkata,
Delhi, Noida, Pune, Chennai and Bangalore. They have smaller regional distribution
centres at over 500 locations spread across Tier I and high volume Tier II cities. In
Flipkart’s Warehouse Management System (WMS), there are three major segments
namely, Inward Processing, Storage Management and Outward Processing.
Discussed below are the some of the details regarding each of the sub-processes
involved in the WMS.
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Inward Processing
Physical inwarding:
This is the area where physical delivery of goods from suppliers to the warehouse
is taken.
Pre-packing of products:
At this stage, an initial packing of each of the products is done. This pre-packing
varies according to product. For instance, a book-mark and think transparent film
packing will be done for a book. Similarly, if there is a freebie attached to a product,
then the two products will be packed together.
Storage Management
Put-list generation: When the input of all products is done on the IT systems, a
system generated list of shelves corresponding to the products is generated to
facilitate placement of products on shelves. This is called Put-list generation, which
marks the place where the respective items need to be put.
Order pending check: As soon as the system gets the input of the incoming
products, system checks if any of the orders for the incoming products are pending
or not. If orders are pending, the respective product is sent directly to the Final
Packaging Area for Outward Processing.
Physical placement on shelves: Based on the Put-list, the products are placed on
the respective shelves. If the marked shelves are not empty, the product is put on
an empty shelf, and the respective shelf number is updated on the Put-list.
Closing Put-list: Once the product placement is done, Put-list is updated with the
actual placement information and the list is Closed.
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Outward Processing
Pick-list generation: Based on the orders to be delivered for the day, a Pick-list is
generated by the IT system.
Pick-up from shelves: The respective products from the Pick-list are picked up from
the shelves as per the IT system entries and gathered together to move towards
Final Packaging Area.
All the scans while conducting inward processing for each of the products are done
manually. There is some scope of automation at this stage. Due to packaging litter,
there emerge chances of difficulty in mobility within the warehouse. Disposal of
packing material may be addressed for better streamlining and ease of mobility.
Currently, there are separate sections for separate categories in the storage area,
e.g., in the Bangalore warehouse, a whole floor is dedicated to books, while the
other floor is dedicated to other categories. With the increase in the number of
SKUs that Flipkart is undertaking for sale, the Warehouse management system’s
complexity will increase and its scalability in the current form might come under
question. Hence, pre-emptive efforts may be made to make sure that the systems
and processes are scalable based on increasing variety and quantity of SKUs
handled.
Order Processing
Flipkart uses its own ERP systems to process orders and track the details of all the
transactions that need to be carried out. A typical order at Flipkart starts with the
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The payment can be made by using debit card, debit card, Net-banking or COD
(Cash on Delivery). Flipkart launched its payments brand called PayZippy in July
2013 to provide safe and hassle free payment option to its customers and online
merchants.
ORDER FULFILLMENT
Customer orders are fulfilled either via Inventory or JIT procurement depending
upon the availability
availability if products.
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As soon as the order is placed and approved, there is an inventory check done at
the local warehouse. If the item is not found at the local warehouse, then the order
goes to the nearest and then other warehouses. The product is then packaged and
delivered to the customer. If the item is not found in the inventory it is forwarded
to the Regional Procurement Team (RPT) for JIT procurement from local vendors.
If yet not possible, the order goes to the central procurement team (CPT) for the
last option of procurement. After procuring from the vendor, the product is
packaged and delivered to the customer via the most convenient warehouse. They
have an understanding with their vendors for order tracking, reconciliation and MIS
(Management Information Systems).
Flipkart, with its focus on customer delight, ensures an excellent after-sales service
to its customers with regard to the delivery and/or addressing grievances related
to any faulty or unsatisfactory products. The return of such items is done in an
effective manner without any disputes. This is possible given the understanding
with the vendors. For example, in case of electronics, warranty and after-sales
service is largely manufacturer‟s responsibility. Whenever required, Flipkart
facilitates a smooth interaction between the customer and manufacturer/service
centre. Flipkart varies between one day guaranteed delivery and three weeks
depending on location and availability of product.
Inventory Management
The inventory stocks are replenished whenever it goes below Reorder point. The
company employs FIFO (First In First Out) method for its inventory management,
under which for any shipment request to a particular warehouse the oldest
inventory items are shipped first. This makes a lot of sense especially for the
electronics items since the technology becomes obsolete very quickly.
With respect to determining what items to store in the warehouse and what items
to be procured from vendors, Flipkart uses Long Tail Concept, which is nothing but
selling a large number of unique items with relatively small quantities. Flipkart
orders such items on adhoc basis and usually don’t keep inventory of such items
since the demand for such items is very less and thereby minimizing overall
distribution and inventory costs.
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Supplier Management
Flipkart has always operated on the philosophy of starting out small and then
scaling up as demand grows. It has been the same with selection of suppliers. For
a new category, they generally start of by sourcing from local suppliers and
distributors. Once there is enough demand generated, they approach the larger
wholesalers or manufacturers directly. This serves two main purposes:
• It helps them to get better deals from the bigger manufacturers if they can
order in larger quantities frequently enough.
• It avoids the channel conflict dilemma that large suppliers face when they
agree to similar terms with a smaller volume online player like Flipkart as
compared to an established offline distributor.
Customer Support:
Customer Support function for an e-commerce website is one of the most
important touch-points for the business in terms of building trust, customer
acquisition and maintaining customer loyalty. Flipkart’s Customer Support team
consists of call-centre agents who handle in-bound and outbound calls and also a
team that handles e-mail queries. The entire team is based out of Bangalore and
forms a core part of Flipkart‟s 6,000-strong employee base. Given that Flipkart
tries to differentiate itself on superior shopping experience and customer service is
an integral part of that – Flipkart prefers to train its own support staff rather than
outsourcing the function to a BPO agency.
• Sales Assistance,
• General Enquiries,
• Product/Shipping related enquiry.
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CHAPTER 5
FLIPKART’S CURRENT OVERVIEW
The world’s largest retailer, Walmart, has acquired Indian e-commerce giant,
Flipkart for $16 billion and a 77% stake, reports confirmed on Wednesday. Walmart
and Flipkart will remain separate brands with the goal of transitioning Flipkart to a
publicly-listed, majority-owned subsidiary in the future.
The acquisition is Walmart’s biggest deal ever and also one of the most successful
exits by an Indian startup. However, the Indian business community, as well as the
general public, are polarized as to whether this deal is good or bad for the Indian
ecosystem.
VISION:
MISSION:
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FLIPKART MARKET
POSITIONS IN INDIA:
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SUGGESTIONS
Flipkart has successfully placed itself into the prospects mind making it the India‘s
largest online store with huge range of products. But Flipkart still needs to work on
their core competence that is books and stationery items. With the entry of
Amazon.com it will be a huge competitive market for Flipkart and hence will have
to position itself better, as we still see that huge percentage of females are still
unaware of Flipkart. Those female who purchase, has a very less frequency which
has remained unchanged. Therefore they need to get aggressive at providing better
services which can be fulfilled by reducing the delivery time, selling second hand
products which will increase consumers‘ affordability much more and enhance
penetration into the market.
They can even have their retail stores which can give an access to consumers to feel
and analyze the products, which will help them win the consumers faith. Price will
still be a factor as amazon being a huge company will use its economies of scale to
remove their competitors from the market; therefore they need to be more
competitive on that aspect. Be very focused on consumers and build amazing
experiences for the customers.
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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.
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.
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QUESTIONNAIRE
Thank You for participating in this Survey. I am a student of Undergraduate course
at Khalikote university. The information provided by you will be kept fully
confidential and will not be used for any other commercial purpose except
academic learning.
Q1) Gender?
Male Female
Yes No
Snapdeal Amazon
Flipkart Junglee
Homeshop18 Any other
T. SUBHAM SHARAFF
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Yes No
Q7) Do you agree on Flipkart’s claim that it’s every products are 100%
Genuine?
Yes No
Good Poor
Q10) Do you believe that at Flipkart’s web portal all several stuffs are always
available?
Yes No
Can’t say
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Q12) Are you satisfied with the after sales services of Flipkart?
Q14) After rating above questions your overall satisfaction toward Flipkart?
Highly Dissatisfied
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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
THANK YOU
Name: T. Subham Sharaff
RollNo: BC16-120
Exam RollNo:011603CM380
T. SUBHAM SHARAFF