Flipkart: Transition To Marketplace Model

flipkart
Transition To Marketplace Model

Business Challenges
❏ Brand Damage/Brand Compromise

Misleading of customers by a third-party seller led to Flipkart receiving huge
backlash on social media where a foregoing Facebook post had gone viral
because of which customers were getting sceptical of being catered with a
transparent & trustworthy service
❏ Unorganised Retail Market
Global and National brands consequently dominated only a few product
categories in the Flipkart portfolio and most of them constituted regional &
local brands dominated by unbranded offerings
Business Challenges
❏ Price War
With the entry of Amazon India, the competition intensified among the
e-commerce retail giants (at that time), Flipkart raised the minimum
transaction value for free shipping and increased the shipping charges as
well resulting in sales decline by 15%, and therefore leading to a Price War
❏ Profitability
In spite of Flipkart’s phenomenal growth, its profitability remained elusive
raising questions over the deep discounting model. Profitability of all the
Indian e-tailers was a highly debated issue
Business Challenges
❏ Flaws in the Marketplace Model
Processes and IT enablement of vendors & retailers were not fully geared up
to handle the business efficiently resulting in issues with delivery and the
customer experience. Flipkart’s service levels fell in 2015 as it expanded
operations to serve smaller metros
SWOT Analysis
❏ Strengths
1. First Mover Advantage-Flipkart was able to come up with a new way to get into untapped market because of its Sales
& Marketing solutions and tactics.
2. Wide geographic reach and product portfolio
3. Strong relationship with existing suppliers -Flipkart has strong relationship with its suppliers and other members of the
supply chain.
4. In-house logistic division-eKart
❏ Weakness
1. Customer Dissatisfaction — Despite the fact that product demand has not decreased, there remains a feeling of
dissatisfaction among Flipkart customers. It shows up in the feedback on numerous online platforms.
2. Poor customer service and WOM due to inefficient pricing practice.

SWOT Analysis Continuation
❏ Opportunities
1. Increasing Standardization - Flipkart may take use of this trend to minimise the number of items on the market and
concentrate marketing efforts on the most profitable ones.
2. Artificial Intelligence Advancements – Flipkart can leverage artificial intelligence advancements to better forecast
customer demand, cater to specialised segments, and improve recommendation engines.
3. Rise in customer’s disposable income and changing preferences would increase customer base
❏ Threats
1. Government Laws and Bureaucracy — Under increasing pressure from protest groups and non-governmental
organisations, Flipkart should keep a careful eye on rapidly changing government regulations, particularly in the areas of
environmental and labour safety.
2. New Entrant Threats as a Result of Lowering Costs and Increasing Efficiencies – Competitors, both domestic and
foreign, can benefit from Flipkart cheap cost of contacting customers through social media and e-commerce.
Factors Influencing Decision-Making
Limited choice: Global and national brands were concentrated only in a few product
categories such as smartphones and consumer electronics.
Increased access: Customers in tier 2 and tier 3 cities are able to access
products/brands which they couldn’t do so before.
Sales: “Big billion Sale” has brought in new customers as well as retained the old
one. It increased sale by 25 times the norm
Factors Influencing Decision-Making
Target Market: Having branded or unbranded products on the e-commerce platform
would decide the target market segment being catered to
Payment Method: COD in online shopping introduced by Flipkart was a first in the
Indian market and could be leveraged to enable offline payment for online shopping,
while Digital India Initiative would work in tandem with the COD to ease the
transaction process
Supply Chain Innovation: In the initial years, Indian e-commerce supply chain was
more of a patchwork than being seamless. Having Distribution centers/warehouses
vs increasing vendor base would be the decision point based on the inhouse
innovation in SC&D system.
Approach Alternatives
Inventory Model Lower Discounts Customer Service

As discussed in the case, heavy To ensure that the customers get the
When a company sources directly from discounts and free shipping led to best service, Flipkart will have to
sellers and stocks it. There are no negative margin on products. However, maintain very high customer service
multiple sellers selling one product, to compete in the highly competitive levels as even small hiccups can create
unlike marketplaces, where buyers get environment, the only option is to keep controversy.
to choose from several merchants. up with the competition.
The seller is the ecommerce company Revamping the customer service levels
and invoice is issued to the customers During Big Sales, Sellers are forced to and creating another division for it,
on the company’s name. The company list their items at extremely low prices. taking inspiration from logistics is a
can maintain more control over quality of viable option.
products listed on the platform. Hence a
combination of inventory model with
marketplace model can be considered.
Recommendations
Social Media Track (-) publicity Segmentation

Using digital marketing for For every negative comment there
engagement purposes and sharing should be 3 positive comments at Following a hybrid of stock holding
testimonies and flipkart stories of least. and marketplace model
happy customers. Since Flipkart is
more familiar with Indian audience, To have a positive impact to buy the
they can leverage this. product and now flipkart has created Create an ecosystem of mix of
100 negative mindshare they need to services like amazon ties up with
build minimum 300 positive mindshare customers with prime subscription,
Sellers side to get back to their market share and
need 1000 positive mindshare to get to
prime music, prime video
No. 1 as how they were.
Although sellers are assured, a
regular monitoring of seller
activities should done. Incentivised Focus on having better technical
and trained to sell quality products. customer support service
Group 1
THANK
Akrati Chauhan
Akshat Mahavar
Amar Kumar
Amba Kamat
Arpan Chhabra
YOU
Arpit Sharma
Kirtik Patel
Mitanshu Garg
Neha
Sachi Marathe
Sakshi Vidyarthi
Samruddhi Bhaid
Abhishek Ranjan

Flipkart: Transition To Marketplace Model

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flipkart

Transition To Marketplace Model

❏ Brand Damage/Brand Compromise

❏ Flaws in the Marketplace Model

2. Wide geographic reach and product portfolio

4. In-house logistic division-eKart

2. Poor customer service and WOM due to inefficient pricing practice.

Inventory Model Lower Discounts Customer Service

Social Media Track (-) publicity Segmentation

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