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LAL BAHADUR SHASTRI

INSTITUTE of MANAGEMENT,
DELHI
FINAL PROJECT REPORT
A SUPPLY CHAIN STUDY
FLIPKART.COM
Submitted by
Sandeep Ghosh (212!1"#1$% A&an (!12!1"#1$%
A'(nash A))a*+a, ($-2!1"1$% Kan(.a A)a*+a, ($/2!1"#1$%
ACKNOWLEDGEMENT
We take immense pleasure in thanking Prof. Prashant Guta for having permitted
us to carry out this project work. We would also like to express deep sense of
gratitude towards him for guiding us, which helped us in completing the project in
time.
Finally, yet importantly, we would like to express our heartfelt thanks to our team
members, friends and classmates for their help and wishes for the successful
completion of this project.
Ta!"# of Cont#nts
Serial
Number
opic !age
Number
"# he internet retail industry in $ndia
"% &ethodology
"' (bout Flipkart.com
") *ompany Structure
"+ !roduct and echnology eam
", -usiness .evelopment eam
"/ 0perations eam
*ustomer Support team
1ogistics
2everse logistics 3 returns processing
!rocurement
Flipkart4s Warehouse &anagement System
$nward !rocessing
Storage &anagement
0utward !rocessing
0rder !rocessing
0rder Ful5llment
$nventory &anagement
Supplier &anagement
*ustomer Support
$ssues and 2ecommendations
*onclusion
Th# $nt#rn#t r#ta$" $n%ustr& $n In%$a
he internet retailing industry grew by ')6 in %"## to 7 #" billion with
investments of about 7 8"" million over last year#. $t is expected to grow at a
compounded rate of '86 over the next + years. 0nline retail account for less
than #6 of the total retail market in $ndia 9compared to about +6 in the :S;,
and thus, presents a huge growth potential for international retailers%.
$nternet retailing in $ndia mainly focuses on non<grocery products such as
consumer electronics, media products, sports e=uipment, consumer
appliances and books> products that do not re=uire extensive touch and feel.
-ooks and gifts, however are the largest contributors. Several $nternet
retailing players are providing much cheaper prices compared with store<
based retailers, which is attracting consumers in $ndia. ?igh discounts are
primarily driving adoption while gaining the trust of consumers through fraud
proof options such as cash<on<delivery. $nvestments in logistics and
infrastructure and support by third party companies have led to ever
expanding reach. $t is evident that $nternet prices are projected to be more
competitive than any other retailers in $ndia. &ost $nternet retailers o@er
services, such as Aexible payment methods, warranties for electronic goods
and free home delivery. he prices from several players are very competitive
with all e<retailing players o@ering good deals on a variety of products in
order to attract customers.
!layers with a wide variety of products have managed to gain the most value
sales. $nternet retailing in $ndia is segmented under di@erent formats,
including vertical shopping, whereby the manufacturer is also the retailer,
multi<product $nternet retailers, such as Future baBaar, Shoppers Stop and
comparison<shopping. $nternational companies were not allowed in $ndia up
to %"#" as the government put a ban on F.$ in multi<brand retailing.
?owever, in %"## the ban was liberaliBed and over the forecast period some
of the major players, including (maBon.com, are expected to enter the $ndian
e<retailing environment. he industry, however, faces many challenges. he
foremost being high customer ac=uisition cost 9C2s #,+""; and small basket
siBe. 2epeat purchases are essential to recover ac=uisition spending.
*ompanies tend to hold extensive inventory of up to ' months in<order to get
discounts from their suppliers, this re=uires substantial investment. $n<house
logistics re=uire further investment and third parties are operationally
expensive < delivery costs +<#"6 of the product value. $nternet retailers are
Dburning cash to fuel growthD, o@ering discounts deeper than their pockets
and spending heavily on advertising and marketing'.
M#tho%o"o'&
We started with secondary research of the internet retail industry and the
major players through news articles, industry reports and databases. his
helped us to get an overall idea of the working of the industry and
understand its dynamics. hen we went on to do extensive secondary
research on Flipkart, its business model and all elements of its supply chain.
hen we did primary research in the form of interviews of &r. Shini !atel, and
&r !avan 2aghuveer both managers<operations and in<charge of S*& and
delivery. With their inputs on procurement, logistics, order processing,
supplier management and customer support and secondary research we
formulated a draft. ?owever, we identi5ed certain gaps and interviewed our
batch mates who interned at Flipkart. With the second round of inputs, we
were able to understand and analyBe FlipkartDs supply chain.
A!out ("$)art.*o+
Founded in %""/ by two $$ .elhi graduates, Flipkart.com is today $ndia4s
largest online shopping website. he etymology of the website lies in the fact
that the founders, Sachin and -inny -ansal envisioned it to be an online
store for books E hence the FAip4 suggests the Aipping of the pages of a book
while the Fkart4 is derived from the Fshopping cart4. $t has been cited as a
success story in the domain of online retail E a sphere generally dubbed as
impossible to succeed in $ndia. Started with an investment of 2s. ) lakhs by
the founders themselves, Flipkart has grown exponentially in the last +
years. his year they are expected to touch 2s. %+"" cr in annual revenues
at a y<o<y growth rate of )""6. ?owever, managing expansion at such
break<neck speed is not an easy task. here are several =uestions raised
about Flipkart4s pro5tability 5gures and core competence of Fdelighting4
customers. $n fact, Flipkart4s philosophy is so closely tied to ensuring
customer delight that pro5tability often takes a back seat. $t is a strategy
that has enabled them to gain lion4s share of the online retail market E but
their operations need to be studied in greater detail to understand if the
company really has a sustainable future. While there have been multiple
=uestions raised about creative accounting techni=ues and other apparent
5nancial irregularities on Flipkart4s books, in this report we4ll concentrate
primarily on the operations side of Flipkart4s business. From an operations
point of view, one of the fascinating things about Flipkart4s growth has been
the increase in number of SG:s and di@erent categories that they now
handle. While there are several specialiBed online retailers like myntra.com
or letsbuy.com 9recently ac=uired by Flipkart; who specialiBed in apparel or
consumer electronics respectively, Flipkart handles more than #) categories
of products. $ncreased number of categories complicates the entire supply
chain design and this is something that has been studied in the latter half of
this report.
Co+an& Stru*tur#
he entire organiBational structure of Flipkart is organiBed in three broad
teams as depicted
below.
Pro%u*t an% t#*hno"o'& Bus$n#ss D#,#"o+#nt O#rat$ons

!20.:* (N. H*?N010IJ


-:S$NHSS .HKH10!&HN 0!H2($0NS
Website &anagement
H2! System
Kendor &anagement
Sales &anagement
!ricing Strategies
!rocurement
Warehouse
1ogistics
*ustomer Support

Pro%u*t an% T#*hno"o'& T#a+
he product and technology team is the core strength of the company. he
team is responsible for the management of the website as well as the H2!
system. $t has developed a state of art system in<house using open source
software. Website is a backbone of any online retail shop and Flipkart4s
website is also managed by this team only. he team manage the entire
process right from listing of item to search engine optimiBation.
Bus$n#ss D#,#"o+#nt T#a+
-usiness development team is responsible for all the activities related to
sales including vendor management to pricing and discount strategy.
O#rat$ons T#a+
0perations team deals with all the supply chain aspects of the company right
from procurement and warehouse management till customer support.he
team support the customers both online via telephone as well as oLine via
email
Custo+#r Suort t#a+
Flipkart has a strong focus on customer service with customer delight as the
top most priority. (nd to ful5l it the company guarantees a %)3/ full customer
support and to cater this facility it has a dedicated customer support team
which o@ers both inbound and outbound support. here are two prime
responsibilities of support teamM
W#!s$t# Gu$%an*#- he team basically provide guidance to new users of
the website on how to navigate through it. $t also handles order processing
functions like order veri5cation calls, payment related =ueries etc.
R#so"ut$on of Issu#s- his includes intimation to customer about issues
such as any delay in delivery as well as resolution of complaints both pre<
purchase and post purchase.
Lo'$st$*s
1ogistics is one of the most important facets of any successful ecommerce
venture. Flipkart ships more than '"""" 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 5nancially complex issue also. ?ence, in order to successfully
manage logistics Flipkart uses its in<house logistics 9FG1; as well as third
party logistics 9'!1; services. While more than 8"6 of the *ash on delivery,
9*0." shipments and about ,"</"6 of the overall shipments are delivered
by the FG1 the rest of shipments are catered by '!1 service providers.
&oreover, if there are more than #"" deliveries for a particular destination
the company uses FG1. $n case of FG1, the shipment is 5rst transported to
&other hub and then to delivery hub and subse=uently from delivery hub the
last mile delivery is done using suitable mode of transport such as two<
wheelers, bicycles, or on foot. he company has tie<ups with more than #+
courier companies like -lue .art, First Flight etc. to deliver their products and
$ndian post for areas where courier do not reach. (nd to manage the '!1
providers eNciently the company allocates time slots to di@erent logistics
partners and they can pick up deliveries on speci5ed time slots only. 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. FG1 is presently available in major tier # cities
including metros only. he company uses $ndia !ost only in case if the
shipment location is not serviced by any of the '!1 as well as FG1 primarily
because of the higher delivery time. &oreover, $ndia !ost orders are of
prepaid nature only. he delivery time varies between ' days to ' weeks
depending on the location and availability of the product. For example
imported products take about ' weeks4 time to get delivered to the
customers whereas if product is available in local warehouse it gets deliver
within ' days. he mode of transportation is also dependent on the location.
For example, the inter<city, trans<Bone deliveries are made using air cargo
whereas satellite cities and others in close proximity> train or truck transports
products overnight. For the local parts of the cities where the warehouses of
the company exist products are delivered using two<wheelers, bicycles, or on
foot depending upon the proximity of the place.
R#,#rs# "o'$st$*s . r#turns ro*#ss$n'
he returns for Flipkart are %.,6. $f follows a '" day return policy. his 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 '"
days. Similar incidents have been observed with mobile phones as well.
Flipkart, through its data management systems, has tried to identify such
frauds. 2eturn of a product to Flipkart can happen if the 'rd party cannot
deliver to the address or the customer does not accept the product. he
courier company cancels some orders while the delivery is being processes.
Such order is not recalled but delivered to the address and then cancelled.
*ustomers can call the customer support and courier backs the product to
Flipkart. he delivery cost is borne by Flipkart.
When a customer re=uests return of a product, there are ' paths this re=uest
can takeM
#. 2eplacementM Flipkart returns the product to the supplier and obtains a
replacement that is delivered to the customer.
%. Store creditM $f the customer is not satis5ed with the product, he or she is
given store credit of the same amount.
'. (ctual cash<backM Iiven out as cash for cash<on<delivery payment or
refunded for online payment.
Pro*ur#+#nt
When Flipkart started its operations, they had employed the consignment
model of procurement. $n this model, the retailer 9in 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. ?owever, they have now discontinued
this now and inventory now is purchased.
!rocurement of items could be forM
9(; InventoryM hese items are pre<ordered based on previous sales data to
stock as inventory. his category includes items with relatively low demand
elasticity, fast selling items and items with relatively long shelf life.
9-; Just in timeM $tems procured just<in<time are used to serve immediate
outstanding orders.
$tems with low or unpredictable demand are typically procured on an order<
to<order basis. Oust<in<time procurement is also used for expensive items or
products that have
seen slow sales growth. (s of now, the number of orders served from the
inventory is roughly /+6, with %+6 orders being served by procuring just in
time. !rocuring just<in<time is comparatively more expensive as the volumes
for such orders are low, and the supplier discount o@ered therefore is
considerably lower. ?owever when ordering for inventory, bulk purchase is
made and hence a much better price is realiBed. herefore, the company
would ideally like to move to a ratio of 8M# ratio of orders served through
inventory to those procured just in time. (s a caveat however, there is an
inherent rade<o@ between the company4s long<term objective of reducing
just<in<time accruement, and its motto of P*onsumer .elightQ. his is
because in order to maximiBe consumer delight, the company would have to
strive to serve all types of consumer orders and provide them with the
maximum possible variety of products, which would
re=uire just<in<time procurement since many products have limited demand
and cannot be stored as inventory. ?owever, operational eNciency demands
rationalisation of product line and choosing one4s customers.
Sourcing at Flipkart is conducted at two levelsM
9a; 2egionalM -y 2egional !rocurement eams
9b; *entreM -y the *entral !rocurement eam
Hach regional procurement team has a network of local suppliers for made<
to<stock as well as on on<demand 9Oust in<time; procurement. hey also have
visibility of the stock for di@erent SG:s with these suppliers, as last updated
on the procurement team4s system by these suppliers. From Flipkart4s
perspectiveM
Sto*) outM .e5ned as when the product is unavailable in the inventory 9held
in warehouses; as well asFlipkart4s suppliers 9as last updated; he central
procurement team has visibility of all the regional procurement teams4 views,
and therefore can onitor the stock levels for their suppliers all over the
country. he central team4s
focus is on bigger suppliers with a country<wide reach.
("$)art/s War#hous# Mana'#+#nt S&st#+
Flipkart has / major warehouses spread across the country in &umbai,
Golkata, .elhi, Noida,!une, *hennai and -angalore. hey have smaller
regional distribution centres at over +"" locations spread across ier $ and
high volume ier $$ cities.
$n Flipkart4s Warehouse &anagement System 9W&S;, there are three major
segments namely, $nward !rocessing, Storage &anagement and 0utward
!rocessing. .iscussed below are the some of the details regarding each of
the sub<processes involved in the W&S.
In0ar% Pro*#ss$n'
#. Physical inwarding: his is the area where physical delivery of goods from
suppliers to the warehouse is taken.
%. Quality Check + Scan: (s soon as the goods are received, they go through
an initial =uality check at this stage. (fter this, they are scanned to make an
electronic entry to record the input of goods into the warehouse on the $
systems. his step of =uality check is also undertaken at the supplier4s
premises depending on the contract that
Flipkart has with them.
'. Pre-packing of products: (t this stage, an initial packing of each of the
products is done. his pre<packing varies according to product. For instance,
a book<mark and think
transparent 5lm 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.
Stora'# Mana'#+#nt
#. Put-list generation: When the input of all products is done on the $
systems, a system generated list of shelves corresponding to the products is
generated to facilitate placement of products on shelves. his is called !ut<
list generation, which marks the place where the respective items need to be
put.
%. Order pending check: (s 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. $f orders are pending, the respective product is sent directly to the Final
!ackaging (rea for 0utward !rocessing.
'. Physical placement on shelves: -ased on the !ut<list, the products are
placed on the
respective shelves. $f the marked shelves are not empty, the product is put
on an empty
shelf, and the respective shelf number is updated on the !ut<list.
). Closing Put-listM 0nce the product placement is done, !ut<list is updated
with the actual placement information and the list is *losed.
Out0ar% Pro*#ss$n'
#. Pick-list generation: -ased on the orders to be delivered for the day, a
!ick<list is
generated by the $ system.
%. Pick-up from shelves: he respective products from the !ick<list are picked
up from the shelves as per the $ system entries and gathered together to
move towards Final
!ackaging (rea.
'. Final packaging: he picked<up products are packed in Flipkart<branded
boxes. (t this stage, packaging is done according to the *ategory of the
product, e.g., electronic items are packed di@erently from stationery.
). Placement in respective delivery hus! ags: (fter the 5nal packaging, a
product is placed in a speci5c bag which is dedicated for that destination
area delivery hub. hese
bags are dispatched to their respective delivery hubs on a 5xed timing
during the day.
So+# $ssu#s $%#nt$1#% at th# War#hous# Mana'#+#nt "#,#"M
#. (ll the scans while conducting inward processing for each of the products
are done
manually. here is some scope of automation at this stage.
%. .ue to packaging litter, there emerge chances of diNculty in mobility
within the warehouse. .isposal of packing material may be addressed for
better streamlining and
ease of mobility.
'. *urrently, there are separate sections for separate categories in the
storage area, e.g., in the -angalore warehouse, a whole Aoor is dedicated to
books, while the other Aoor is dedicated to other categories. With the
increase in the number of SG:s that Flipkart is undertaking for sale, the
Warehouse management system4s complexity will increase and its scalability
in the current form might come under =uestion. ?ence, pre<emptive e@orts
may be made to make sure that the systems and processes are scalable
based on increasing variety and =uantity of SG:s handled.
Or%#r Pro*#ss$n'
Flipkart uses its own H2! systems to process orders and track the details of
all the transactions that need to be carried out. ( typical order at Flipkart
starts with the customer searching, selecting the re=uired item and placing
the order. his on an overage takes around R<#" clicks to get the order
placed. he email $d is considered to be the uni=ue identi5cation of a
customer and all the records are maintained with reference to this $d. he
payment can be made by using debit card, debit card, Netbanking or
*0.9*ash on .elivery;. he payment gateway used is powered by **
(venue. Flipkart is working to have its own payment gateway which has not
been possible so far because hosting a payment gateway re=uires ful5llment
of !ayment *ard $ndustry .ata Security Standards 9!*$ .SS;.
Or%#r (u"1""+#nt
*ustomer orders are ful5lled either via $nventory or O$ procurement
depending upon the availability of the products
#. (s soon as the order is placed and approved, there is an inventory check
done at the local warehouse. $f the item is not found at the local warehouse,
then the order goes to the nearest and then other warehouses. he product
is then packaged and delivered to the customer.
%. $f the item is not found in the inventory it is forwarded to the 2egional
!rocurement eam 92!; for O$ procurement from local vendors. $f yet not
possible, the order goes to the central procurement team 9*!;for the last
option of procurement. (fter procuring
from the vendor, the product is packaged and delivered to the customer via
the most convenient warehouse. hey have an understanding with their
vendors for order tracking, reconciliation and &$S 9&anagement $nformation
Systems;. (s and when the item is found, it is packaged then and there and
shipped to the customer via either courier, $ndian post or its own internal
logistics arm depending upon the area where the item need to be delivered.
he customer is kept updated on the status of his shipment via message,
email and3or through website. (n item is labeled out of stock only if it is not
neither present in the warehouses nor with the vendors. Flipkart, with its
focus on customer delight, ensuresan excellent after<sales service to its
customers with regard to the delivery and3or addressing grievances related
to any faulty or unsatisfactory products. he return of such items is done in
an e@ective manner without any disputes. his is possible given the
understanding with the vendors. For example, in case of electronics,
warranty and after<sales service is largely manufacturer4s responsibility.
Whenever re=uired, Flipkart facilitates a smooth interaction between the
customer and manufacturer3service center.
Flipkart has fared very well in terms of the delivery time. $t varies between
less than %) hours and ' weeks depending on the location and availability of
the product. 0n an average the delivery time is '<) days with a typical
breakup as followsM
# day for order processing
% days for delivery
# day as bu@er
In,#ntor& Mana'#+#nt
he inventory stocks are replenished whenever it goes below 2eorder point.
$n order to decide on reorder point and demand forecasting of each SG:, the
company employs ?olt4s forecasting method. ?olt4s method is useful in cases
where linear trends are present and re=uires separate smoothing constants
for slope and intercept. he forecasted demand used at Flipkart using ?olt4s
method is based on historic trend and seasonality in not accounted. he
company employs F$F09First $n First 0ut; method for its inventory
management, under which for any shipment re=uest to a particular
warehouse the oldest inventory items are shipped 5rst. his makes a lot of
sense especially for the electronics items since the technology becomes
obsolete very =uickly. With respect to determining what items to store in the
warehouse and what items to be procured from vendors, Flipkart uses 1ong
ail *oncept, which is nothing but selling a large number of uni=ue items with
relatively small =uantities. Flipkart orders such items on adhoc basis and
usually don4t keep inventory of such items since the demand for such items
is very less and thereby minimiBingoverall distribution and inventory costs.
Su"$#r Mana'#+#nt
Flipkart has always operated on the philosophy of starting out small and then
scaling up as demand grows. $t has been the same with selection of
suppliers. For a new category, they generally start of by sourcing from local
suppliers and distributors. 0nce there is enough demand generated, they
approach the larger wholesalers or manufacturers directly. his serves two
main purposesM
#. $t helps them to get better deals from the bigger manufacturers if they can
order in larger =uantities fre=uently enough.
%. $t avoids the channel conAict dilemma that large suppliers face when they
agree to similar terms with a smaller volume online player like Flipkart as
compared to an established oLine distributor.
(n example of this strategy mentioned by !awan 2aghuveer, &gr. Flipkart
Supply *hain Hxcellence .ivision, is that given that Flipkart is now $ndia4s
largest online retailer of books and they are larger than many oLine stores
as well E most of Flipkart4s books are sourced directly from publishers. (cross
product categories, Flipkart works with over +"" suppliers including several
international suppliers as well. Flipkart4s steady rate of growth has allowed
them to get the best credit lines from their suppliers. hey signed their 5rst
international supplier deal with $ngram -ooks in %""R and they prefer
working with them due to high level of predictability. $n fact, considering that
customer delight is Flipkart4s primary motto, any delay in supply can lead to
late deliveries to the end<customer. So Flipkart follows a grading system of
its suppliers based on their 5ll<rate performance. Suppliers are grouped into
(, - and * grades based on their past performance.
here are several other secondary considerations while placing an order with
a supplierM
#. !rice considerations E (s mentioned before E credit lines and discount
terms play an important part in selecting suppliers.
%. Suality *heck contract E .epends on whether S* will be done at supplier4s
place and then product will be shipped to Flipkart4s warehouses or if the S*
has to be done at Flipkart4s warehouses.
'. !ercentages of 2eturns (ccepted E ?igher the percentage of returns
accepted by a supplier, the better for Flipkart.
Custo+#r Suort
*ustomer Support function for an e<commerce website is one of the most
important touch<points for the business in terms of building trust, customer
ac=uisition and maintaining customer loyalty. Flipkart4s *ustomer Support
team consists of call<centre agents who handle in<bound and outbound calls
and also a team that handles e<mail =ueries. he entire team is based out of
-angalore and forms a core part of Flipkart4s ,,"""<strong employee base.
Iiven that Flipkart tries to di@erentiate itself on superior shopping
experience and customer service is an integral part of that E Flipkart prefers
to train its own support sta@ rather than outsourcing the function to a -!0
agency.
(t present, a customer calls due to one of the below reasonsM
#. Sales (ssistance
%. Ieneral Hn=uiries
'. !roduct3Shipping related en=uiry
0ne of the major reasons for these calls is $ndian consumers poor familiarity
with online shopping protocols. $t is important to note that Flipkart tries to
ensure that any order is placed within , clicks on the website.
here is also an outbound call<centre that performs the following tasksM
#. !ro<actively inform customers about any delay in deliveries.
%. !ro<actively check the status of refunds or returns.
'. $nform the user in case any delivery has not been successful due to the
customer not being present at his address.
.espite all the good intentions of Flipkart in providing high<=uality customer
service, there are several internet blogs that suggest that their service
=uality has dipped in the last year or so./ ( major reason for this could be the
growth in number of customer service executives4 not keeping pace with the
increase in business volume. here could also be a problem of increased
complexity in =uery handling due to increase in number of SG:s and product
categories that would demand more rigorous training for the support sta@.
Issu#s an% R#*o++#n%at$ons
#; ( lot of manual labor is utiliBed in warehouses for put<listing and pick<
listing. his could be addressed through high<end 2F$. usage E the way it is
done for major logistic companies like .?1.
%. Warehouse layout needs to be looked into so that increased SG:
complexity can be handled better.
'. $ncluding seasonality in the forecasting process will help meet customer
expectations better during high<rush seasons and manage inventory costs
better during lean periods.
). !eriodic review of categories should be undertaken and non<performing or
highly volatile categories should be dropped 9or replaced with new
categories;.
+. $ncentiviBe customers for using pre<payment 9card card or other forms of
online payment; methods over *o. payment. 0@er H&$ options, discounts
and freebies for non<*o. customers.
2. 2e<visit '"<day no<=uestions<asked replacement guarantee across product
categories. Non<ful5llment of this promise has led to a lot of bad press for
Flipkart. 0perationally, it also keeps customer service teams busy and leads
to additional complications in the reverse logistics path. $t also creates
problems with supplier management, as suppliers may not want to accept
ad<hoc returns based on Flipkart4s policies.
3. $ntroduce premium pricing options and pin<code based delivery<time
schedules.
*urrently Flipkart follows same delivery S1(s pan<$ndia.
R. $n<house !ayment IatewayM *urrently third party !ayment Iateways like
** (venues charge on a per transaction basis. (s number of transactions
grows and average amount per transaction reduces, in<house capability
development can help reduce costs. ?owever, this re=uires compliance with
!*$ .SS standard, which is an added operational complexity.
8. &arket placeM &arket place online shopping is gaining prominence,
competitors like
$n5beam and e-ay have a lead in this domain.
Con*"us$on
$n conclusion, through several interviews with industry insiders, it was
evident that Flipkart is a learning organiBation. hey do not spend a lot of
time in addressing a problem till it becomes a burning issue and a@ects
pro5tability signi5cantly. he company is extremely *H0<driven and
encourages entrepreneurial thoughts. his has enabled a lot of in<house
innovation and organically developed best practices < that have now become
the industry standard. New global competitors with better best practices are
arriving in $ndia shortly. (maBon is the biggest example of the same.
$ncreased competition will put further pressure on margins and will need
better handling of supply chain issues. 1ast but not the least> Flipkart has
very clearly prioritiBed customer delight as its chief avenue for customer
ac=uisition and retention. his causes them to build a lot of slack into their
existing