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. Dr.Poonam Kakkad 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.

Index
Chapter No.
1

Chapter Name
Introduction

Funding

Acquisation

Market Overview

SWOT Analysis of Flipkart

Major Competitors

Market Segmentation

Market Positioning

Marketing Strategies of Flipkart

10

Suggestions

11

Conclusion

12

Bibliography

Chapter 1.
INTRODUCTION
1.1 Origin
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 SachinBansal and BinnyBansal 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).
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.
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.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.

1.2 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 with80 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.

1.3 Objective:

Overview of funding
Study the market overview
SWOT analysis
Study of Competitiors
Study of market segmentation
Examine the market Strategies

1.4 Significance of study:

Managing of funds
Marketing Strategies
Major competitiors
Postioning of the company

1.5 Research Methodologies

This project is only concern with secondary data collection such as publication,
websites, articles, journals etc.

Chapter 2
2.1 Fundings
Initially funded by the Bansals themselves with 4 Lacs.

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
$150million 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
fromnew

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
MilnersDST 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.

Chapter. 3

3.1 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.
2014: Acquired Myntra.com in an estimated INR 2,000 crore deal.

Chapter. 4

4.1 MARKET OVERVIEW

India has an internet user base of about 250.2 million as of June 2014. The penetration
of e-commerce 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 ecommerce 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 ecommerce 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.

4.2 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 highdisposable 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
andreduced 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 AsiaPacific Region at a CAGR of over 57% between 201216
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.

Chapter. 5

5.1SWOT ANALYSIS OF FLIPKART

5.1.1 Strength:
Top Indian ecommerce portal
Diversified into electronic good
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
Investors trust
Services and warehousing
Payment options
Established brand

5.1.2 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
Entry of international on-line competitors in Indian market
Customers are not comfortable with online payment
Not profitable operationally
Time to build confidence among the customers

5.1.3 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 mobileshopping. Development of m-commerce in the e-market
Increasing internet penetration
Target social Medias to reach young population

5.1.4 Threats:

Small players and emerging competitor

In capabilities to manage certain costs like delivery cost, bank charges
High competition from major international online retailers
Capture of alternative market by competitors
Major players like Amazon

Chapter 6

6.1 MAJOR COMPETITIORS

Amazon.com is an American international electronic commerce company with

headquarters in Seattle, Washington, United States. It is the 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 KunalBahl and RohitBansal, in February 2010.

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

Chapter 7

7.1 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

7.1.1 GEOGRAPHIC SEGMENTATION CATERS TO TIER 1, TIER 2 AND TIER 3 CITIES

7.1.2 DEMOGRAPHIC SEGMENTATION 75% of online users between the age group of 15-34 years
Flipkart targets mainly the youth of the country

7.1.3 BEHAVIOURAL SEGMENTATION

Web friendly people

7.1.4 PSYCHOGRAPHIC SEGMENTATION

Flipkart concentrates on more Psychographic, which helps in deciding where
to displayads online
They target online shoppers and people who dont online shop (thus TVC to
encouragethem)

Chapter 8

8.1 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.

8.2 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

8.2 Points of Difference:

Flipkart membership cards for premium customers
Vernacular language
Better user interface-one drag approach

Chapter 9

9.1 MARKETING STRATEGIES

Word of mouth (initial marketing even now they want to satisfy customer so
they comeback for more) Good use of SEO
We DO NOT sell old books or used books. All the books listed at
Flipkart.com are newbooks. 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
Customer conversion rate is so high more than 70%
Personalization of the user page
Product recommendation with your previous purchases

9.2 Poters 5 forces

Bargain power of suppliers (low)

The readers arereducing 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 (snap deal)
Entry of international players like Amazon into India

9.3 Product:
Aims most segments except automobiles and groceries.
Website is great, easy to use, and easy to browse through theproducts, add
products towishlist or to a 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

booksavailable 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
andbreakage proof.
Product lines 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)
9.4 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 them by giving best selections, best services at lowest best
possibleprices.
Discounts up to 35% across all categories
Upper edge in competitive pricing
Special discount for loyal customers and regular buyers

9.5 Place
Channel type: Words of mouth (if we can say that) which has been key driver
for theirgrowth.
When an order is placed they either serve the order from their inventory or
procure thebook 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 TierIII cities

Shipping and Courier would act as intermediaries in this process.
Delivery services through e-kart and postal services
Company owned warehouse in major cities near airport
Trying to achieve minimum returns

Warehouses are located in the following cities, often near airports

Bangalore
Chennai
Delhi
Hyderabad
Mumbai
Noida
Pune
Kolkata

9.6 Promotions

 Employees of divisions like Website, Business Planning and Analytics, ERP,

BusinessDevelopment, Product Management and Marketing, Supply-Chain
Management and Customer Support are generating revenue for it.
Selection Criteria at Flipkart:-While years of experience are always beneficial
for acandidate, Flipkart's focus is to hire those who are able to consistently
raise the bar and introduce a variety of innovation to move this organization
forward. As Flipkart grows, we feel it is absolutely necessary that our
employees are also 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
theunsold/goods not much in demand.
Majority of Flipkart are employed in Customer support division.
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

With the increasing trend of online shopping, retail websites are aiming to earn huge
profits in India. Flipkart has announced Monday, October 6, 2014 as the 'Big Billion
Day. The online shopping website claims that its customers will be offered big
discounts on October 6. The company has also made sure that its online ads connect
to the Indian audience.
9.7 Packaging:
As the country's largest e-commerce company, Flipkart.com ships almost 5 million
items a month, 3 million of them in corrugated boxes. These containers now come

printed with board games and puzzles Sudoku, Snakes and Ladders, Ludoor animal
prints as it seeks to leverage that last-mile connect for brand recall.
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
9.8 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.
Customer service centers for complaints and review.
Investors
Employees schemes
9.9 Customer
Support function for an e-commerce website is one of the most important touchpoints
for the business in terms of building trust, customer acquisition and maintaining
customer loyalty.

At present, a customer calls due to one of the below reasons:

Sales Assistance
General Enquiries
Product/Shipping related enquiry

There is also an outbound call-centre that performs the following tasks:

 Pro-actively inform customers about any delay in deliveries.

Pro-actively check the status of refunds or returns.
Inform the user in case any delivery has not been successful due to the customer
notbeing present at his address.
9.10 Process
Cash on delivery
Debit and Credit card transactions
Delivery time

9.11 Returns Processing

If follows a 30 day return policy this policy which is primarily aimed to build trust
with the consumers, has led to many customers duping Flipkart. 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.

When a customer requests return of a product there are 3 paths this request can
take:
Replacement: Flipkart returns the product to the supplier and obtains a
replacement that is delivered to the customer.
Store credit: If the customer is not satisfied with the product, he or she is given
store credit of the same amount.

Actual cash-back: Given out as cash for cash-on-delivery payment or refunded for
online payment.

Chapter 10

10.1 SUGGESTIONS
Flipkart has successfully placed itself into the prospects mind making it the Indias
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 consumer 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.

Chapter 11

11.1 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.

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www.startupdunia.com/interview-with-flipkart-founder-binny-bansal-776
www.facebook.com/flipkart
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