Flipkart online retail


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Flipkart online retail

  1. 1. Bhawani Nandan Prasad 1. Macro Level Current Business Environment In the past few years, India has proved to be nectar for major MNC‟s around the world. With favourable policies, India is one of the most favourable destinations for FDI. Opportunity in Current Business environment India Economy • Among the poorest countries in terms of per capita income • But: 1
  2. 2. Bhawani Nandan Prasad – High growth rate (but low agriculture growth rate) – High investment/savings rate – Low share of agriculture in GDP (but high services share) – More diversified industrial structure – Foreign exchange constraints – less binding? Strengths of Indian Economy  High GDP growth rate  High growth in merchandise exports (though imports grew even faster)  High growth in services trade  High capital flows  Not affected much by the global crisis  Overall positive outlook for India Weaknesses of Indian Economy  Imbalance between Agriculture, Industry and services becoming more acute  Inequality is growing- in different spheres  Human Development Index remains low in spite of growth.  Inflation becomes a major problem  Food security threatens to becoming a problem 2
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  4. 4. Bhawani Nandan Prasad Major Issues of concern for India • More than 50% of population depend on agriculture but low growth rate 4
  5. 5. Bhawani Nandan Prasad • Jobs in organized sector have not increased despite industrial and service sector growth • Inter-state disparity • Poverty has declined but at modest rate • Malnutrition has decreased but magnitude still very high • Poor health, education, clean drinking water, sanitation – very low HDI 5
  6. 6. Bhawani Nandan Prasad 2. Current Retail Online Industry Compared to the more mature and far bigger online retail markets in the U.S. and Europe, India’s ecommerce sales are relatively small. They are estimated at about $1.6 billion by market research firms such as Forrester Research Inc. and some Indian e-commerce venture capital firms. But the Indian direct-to-consumer e-commerce market is likely to double in size to more than $3 billion within three years, and could grow to reach $15 billion by 2017. India’s online customer base of around 20 million shoppers could increase as much as 1400% and reach 300 million shoppers within 10 years. “It’s an exciting time to be in e-commerce in India, because even though the market has been developing since 2000 it’s still very early on in the development stage. Secure payments processing remains a challenge, order fulfilment and package delivery to 60% of the Indian population that lives outside of major cities such as Mumbai and New Delhi is problematic, and India has a very low percentage of consumers with a credit or debit card compared with other countries such as the U.S. and Europe. On the plus side, the number of Indian consumers with a smartphone connected to the mobile Internet could approach 220 million within the next 10 years Today the Indian online retailing market has thousands of individual e-commerce sites and only about 80 well-known online retail companies such as Flipkart.com, a six-year old web-only mass merchant with annual sales of about $100 million. Catering to Indian consumers that connect to the web via mobile phones will be key to e-commerce success in India. India’s emerging base of online shoppers will be consumers age 25 and under with web-enabled smartphones who are active users of social media. India has one of biggest bases of 6
  7. 7. Bhawani Nandan Prasad Facebook Fans in the world. There are 62.7 million Facebook users in India, representing 68% of the country’s online population, according to SocialBakers, which tracks activity on social networks. In addition, the online shopper base in India will be increasingly females who will shop with increasing frequency online. Today the average consumer in India who shops online may do two or three transactions per month. In just a couple years as the market grows and matures, the average online shopper could be doing more like four to five transactions per month. During a keynote speech at eTailing India Expo, Matrix Venture capitalist Bajaj told attendees that venture capital funding of Indian e-commerce companies, especially smaller start-ups, is improving. “The good news is that India now has 15 or so seed funds to invest in smaller start-ups,” Bajaj says. “It’s a good time to be bullish on e-commerce in India.” Major Trends – Retail Industry  Retail Sector growth rate last Year in the world - India as second  China - 10.7 % , India - 9.4 % , Russia - 6.7 % ,Brazil - 3.7 % , UK - 2.8 % ,  Japan - 2.3 % ,US - 2 %  60% of India’s population is under 24 year’s age.  600-700 Million (Generally rural People) affords simple industrial products e.g. bicycles, radios, textiles etc. (60% Indian Population - Common lower middle Class)  250-300 Million afford goods like Refrigerators, Scooters and Color TVs. (25% India Population - Middle Class) 7
  8. 8. Bhawani Nandan Prasad  70-80 Million affords Cars, Private healthcare, Foreign travel etc. (7% India Population Rich or Upper Middle Class)  5-7 Million Super Rich (less than 1% India Population)  70-80 Million (7% India Population Poor - Hardly buy stuffs) Drivers for Indian Retail  Customer value drivers are continuing to fragment as a result of changing demographics and value systems.  Consumption expenditure is 60% of India’s GDP.  High Income opportunities  Service Sector creating new jobs.  Working Population will rise 70% each year.  IT Industry increasing professional opportunities.  Rising Salary Levels.  MNCs entering India and homegrown companies going global.  Changing Attitude  From Save to Spend Nature, emphasis on personal life style  Nuclear Family  High disposable family income structure on a rise 8
  9. 9. Bhawani Nandan Prasad  DINK (Double Income No Kids)  Multi Income families  International Exposure  Exposure to global trends  International travel  Necessities to Life Styles  Shift from basics to Life Style products  Increase in spend on Apparel, Personal Care, Entertainment  Credit Boosts retail credit Cards  Market & Government  Easing out on Import barriers  FDI  Fluid retail segments  M-Commerce and E-Commerce boosts retail 9
  10. 10. Bhawani Nandan Prasad 3. Executive Summary of FlipKart Flipkart went live in 2007 with the objective of making books easily available to anyone who had internet access. Today, FlipKart present across various categories including movies, music, games, mobiles, cameras, computers, healthcare and personal products, home appliances and electronics, stationery, perfumes, toys, apparels, shoes – and still counting! Be it our path-breaking services like Cash on Delivery, a 30-day replacement policy, EMI options, free shipping - and of course the great prices that FlipKart offer, everything we do revolves around our obsession with providing our customers a memorable online shopping experience. Flipkart delivery partners work round the clock to personally make sure the packages reach on time. Flipkart is a leading destination for online shopping in India, offering some of the best prices and a completely hassle-free experience. 10
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  27. 27. Bhawani Nandan Prasad 4. SWOT Analysis 27
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  30. 30. Bhawani Nandan Prasad 5. FlipKart Organization Structures and Leadership Team Participative and corporate Leadership.  Sachin Bansal, CEO and one of the co-founders of Flipkart  Binny Bansal other co-founders of Flipkart  India‟s largest e-tailer which clocked sales (our guess of gross merchandise value or GMV) of Rs 500 crore (factoring out the recent ups and downs in forex rates, around $100 million) in FY2011-12, a ten-time increase from FY2010-11. The key to success has been the execution and that essentially means the people working for Flipkart. Currently, the company has on board a 4,800-strong team.  Ravi Vora (joined in March 2011), VP (marketing), seems to be the right hand man of the Bansals. This IIM-Bangalore alumnus has been instrumental in setting up the marketing function and spearheading the positioning and branding strategy of the company. The „Fairy tale‟ and „No kidding, no worries‟ ad campaigns have given „Brand Flipkart‟ a considerable push/facelift both in terms of revenues and customer base.  Mekin Maheshwari (since Sept 2009), president (engineering) at Flipkart.com, is responsible for leading the engineering team, scaling up Flipkart‟s business at a rapid speed. His LinkedIn profile says, “I help make e-commerce happen in India.” A bachelor of engineering in Information Science from Visvesvaraya Technological University, Maheshwari had earlier worked with Yahoo!, Ugenie and Lulu (post its acquisition by Ugenie).  Ankit Nagori (in Flipkart since 2010), VP (categories), is an IIT-Guwahati alumnus who heads multiple categories and helps the e-tailer build its team across multiple 30
  31. 31. Bhawani Nandan Prasad offices. After acquiring Letsbuy.com a few months ago in a bid to boost its electronics product catalogue going forward and launching the digital music store Flyte, Flipkart has expanded into pens & stationery, home appliances, perfumes and most recently bags, belts & luggage.  Karandeep Singh (joined the company in January 2012), Flipkart CFO, is the one who handles all aspects of finance and corporate governance. Within weeks after he joined last December, Flipkart reportedly raised a mega round of funding from existing investors and also announced the acquisition of Letsbuy.  Sameer Nigam (joined in October 2011), VP (digital business), was the founder of Mime360.com, a digital distribution platform solution which hosts music streaming for labels like Saregama, Universal Music and Inreco, which was acquired by Flipkart last October. This made public Flipkart‟s plans of entering the digital distribution domain and the company did launch Flyte, one of India‟s largest legal online music stores.  Maneesh Mittal (been with Flipkart since September 2009), VP (operations), is a B.Tech from IIT-Delhi. Although he joined the e-commerce company as a general manager, he went on to become AVP (warehousing) and was finally elevated to VP last year.  Sujeet Kumar (joined in December 2008), president (operations) at Flipkart, is a B.Tech in Civil Engineering from IIT Delhi. He has been there for quite some time and has been responsible for building the company, along with the Bansals. Kumar oversees supply chain, warehousing and logistics, and is also in charge of business 31
  32. 32. Bhawani Nandan Prasad development for all categories. Plus, he is the one who ensures „customers‟ delight‟ through smooth operations at every level. 32
  33. 33. Bhawani Nandan Prasad 6. Customer Social Responsibility drive by FlipKart Flipkart has not contributed in CSR but may take initiative in near future. 7. Objective of the Study Study How FlipKart succeeds in online retail business. 8. Analyse the Study Flipkart success has been from best customer service, organized efficient supply chain management, innovative e-commerce technology. 33
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  36. 36. Bhawani Nandan Prasad Bibliography / Bibliography 1. www.flipKart.com 2. www.internetretailer.com 3. techcircle.vccircle.com 36