Submitted By:

Section- C
Group 7

 AAYUSH RAJ-19A1HP069

 ANKUR SRIVASTAVA-19A2HP453

 PIYUSH KATRE-19A1HP060

 SHIVKANT TIWARI-19A3HP658

 AMAN KUMAR JHA-19A3HP660

 RAM DHAR-19A3HP666

 ROHIT JONATHAN YELLAMELLI-19A2HP452

 SUMMARY
Flipkart is one of the leading e-commerce marketplace in India established by Sachin Bansal
and Binny Bansal in the year 2007 with an initial capital of $6000. Flipkart runs on a
discount-based model. Although it started by selling books online but by 2016 it had
transitioned to a wide variety of goods over 70 categories divided across seven product lines.
To overcome mistrust by customers on e-commerce websites, flipkart launched “cash on
delivery” (COD) payment option.
From 2010 to 2016 , flipkart further expanded by way of acquisitions. It acquired online
fashion shop myntra.com and rival jabong.com in 2014.
Its main competitors are amazon and Snapdeal. Amazon was flipkart strongest competitor
after entering Indian market in the year 2013.
In June 2016 flipkart introduces a new return policy on products as a measure to its falling
market valuation from US$142.24 in June 2015 to US$87.9 in march 2016. The policy
proposed charging sellers both shipping and collection fees for all products returned after
purchaser .In response to the new policy two seller associations with around 1800 sellers
protested the new policy.
Flipkart knew that customers were misusing its no questions asked policy and was in a
dilemma on how to reduce losses from excessive returns while satisfying both customers and
sellers.

Q1. Customers reasons for returning the product.

The customer may have many reasons to return the product. But the top reasons for returning
the product are as follows:
Genuine Reasons
a) The customer may have ordered the incorrect product or incorrect size.
b) The product did not meet the customer expectation.
c) The company may have shipped the wrong or defective product.
d) The product did not match with the description given on the online site.
Unethical Reasons
a) The customer is a habitual returner who buys item once and have no intention of
keeping them afterwards taking advantage of lenient policies.
b) Window shoppers who carelessly order items without planning to keep them.
c) Customer replace original products with replicas before returning them.
Common reason cited by customers (page 4)
a) No longer need this product.
b) Intentionally ordered more than one size of wearables with the intent of returning
extra.
Q2. Affect of return policy on customer buying choice.
Situation 1: lenient return policy
Benefits:
a) A free and easy return and replacement offers customer sufficient time window for
returning and replacing thus increasing reliability on E commerce portal without any
extra charge.
b) A lenient return policy increases customers willingness to pay as he perceives that he
can return the product for less hassle or no hassle
Drawbacks:
a) Customers may misuse the policy and order products without intent to retain.
b) The cost incurred to process these returns is huge.
Situation 2: strict return policy
Benefits:
a) misuse by customers will be curbed and people will think before making a decision to
buy.
b) the cost of logistics will be reduced .
Drawbacks:
a) it negatively impacts customer and may cause decline in sales because they are part of
consideration on every purchase made by customer.
b) Strict return rules do not necessarily lead to better reduction in returns.
c) Depending on the size, the stricter rules may cause competitors to take advantage and
take over customer base.

Q3. Measures to be taken by Flipkart to reduce product returns

The possible measures which can be taken by flipkart to reduce returns are as follows:
In case of genuine returns
 Marketing right features
 Make sure that sizes and specification are right.
 Offer after sales services.
 Encouraging customer reviews on the website.
 Getting packaging right to reduce damage to products.
 Giving detailed and correct information on the product.
In case of returns made unethically
 Flipkart needs to develop a Customer Relationship Management (CRM) system,
where flipkart can identify habitual returners and tag such customers.
These customers can be excluded from free shipping or full refund offer
 Create an investigative team to deal with such customers.

Q4. Recommendations to flipkart to deal and retain sellers in short and long term\
From exhibit 2 we can see that Flipkart charges sellers for shipping and pickup if product
was replaced and also there was no refund given to sellers for collection fee and pickup fee,
and also charged shipping fee for the products returned.
This was the reason for the protest from the sellers which can be resolved in the following
ways.
Short term:
Flipkart should make the sellers understand the following points to ensure seller retainment in
short term
 flipkart can help increase market position.
 Flipkart can help sellers build customer loyalty and obtain brand image
 How flipkart can reduce cost of market entry and entry into international markets.
 Have the sellers pay for returns only in case of actual fault of seller or damaged
product.
Long term
Without question , the leading business companies need to embrace both buyers and sellers to
grow as a company and the way to achieve this is through relationship marketing
 Flipkart needs to skilfully conduct and establish a partner relationship management
(PRM) unit and include sellers as a part of delivering value to customers.
 Establish a cost-efficient supply chain to reduce cost, and have both flipkart and
sellers bear the cost on returned products.

Conclusion:
Flipkart has to create a unique marketplace for sellers and buyers to retain both customers
and sellers and increase market position and grow as a company.
Flipkart return policy is one such factor that can determine its rise or fall and the return policy
must be carefully developed such that both buyers and sellers are satisfied.