Flipkart WiRED 2019 | Campus Case Challenge

[Campus Round]

About Flipkart
Flipkart, which started operations in 2007 by selling books, is today the largest e-commerce player in
India — with approximately 200 million subscribers operating across 80+ major categories. With the
internet base expanding in India, Flipkart is eyeing this opportunity to come up with many new
initiatives to ensure top-of-the-mind brand recall for online shoppers. Customer First is one of the core
values at Flipkart since inception and here are some of the initiatives that the company has
experimented with to increase customer engagement and mindshare​:

2010 Cash-on-Delivery Service

2011 30 Day Replacement Policy

2012 Fashion & Lifestyle Category Launch

2013 Launched Marketplace & Same Day Delivery

2014 The First ‘Big Billion Day’ Sale

2015 Flipkart Lite - Mobile Focus

2016 No Cost EMI

Private Labels & Expanding Categories

2017 (Large Appliances, Furni-sure, Refurbished business)

2018 Grocery, Shopper Audience Platform (tie-up with Hotstar), Flipkart Plus

2019 Buy Now Pay Later, 2Gud, Supermart, Supercoins, Games, Travels

If you want to know more about the innovations by Flipkart visit

https://stories.flipkart.com/category/innovation/
Problem Statement
Internet in India​ :

By most estimates, 57% of the world population is now on the Internet and on an average spend close to
6 and a half hours online every day. Closer home, 560 Mn Indians are on the internet with
approximately 250 million users in Urban areas (Metro till Tier3 and below).
90% of Indian internet users access the internet on their mobiles and spend 7.5 hours on an average per
day online.
It is not an exaggeration to say that internet penetration in India is set to explode in the next 2 years
with multiple projections pegging this number close to 750 Mn users by 2021. This growth in new users
will change the internet landscape dramatically.
Already, trends are emerging which suggest that most new internet users are going to move towards
consuming entertainment, doing financial transactions and shopping online much quicker than their
predecessors with cheap data, better network speed and connectivity fueling this rapid adoption.

Important facts​ :
● E-commerce constitutes less than 10% of overall retail in India and while so far being largely an
urban phenomenon, it is growing rapidly in tier 3 and below every year.
● Less than 50% of Internet users shop online or do financial transactions, most of them confine
themselves to just messaging, social media or entertainment.
● Entertainment is fast catching up on social media to emerge as the primary category for internet
usage behind messaging in both Urban and Rural India.
● More than 50% new internet users are likely to shop online within the first year, up from less
than 30% earlier.

Flipkart at a crossroads​:

There is massive headroom for growth in each of these categories with the explosion in new users, be it
Shopping, entertainment, payments etc Does this mean that the winner in such a landscape will be the
one who is a one stop destination for all of them or solves one/few of them deeply?

Looking at ecommerce specifically, the next step jump in scale will come from deeper penetration of the
category on both it’s ‘supply side’ and ‘demand side’. On the supply side, this may mean solving for easy
and scalable onboarding of sellers who are today exclusively offline and get the ‘bazaars’ of India online
as well as expanding the supply chain network and ​f​ulfilment centers to reach these new users. This
could potentially mean Flipkart building new capabilities or forging partnerships to strengthen the
foundation for eCommerce 2.0
On the demand side, getting these new users to start shopping may require players to not just be a
shopping destination, they need to cater to their other needs like entertainment, financial services and
hence may require Flipkart to pivot away from just being a shopping destination.

Globally, internet companies have taken different routes to this end. In China, the progression towards
“Super apps” has ensured that customers can find everything they need on a single app. Customers use
apps like WeChat, Meituan Dianping etc for a wide range of activities like entertainment, flight/hotel
bookings, messaging, news, financials services like loans and investments etc

These apps either fully own these different verticals or partner with different players, like JD.com in
Wechat’s case (e-commerce on a messaging app), to provide the required offering. Another example is,
WeChat Pay being offered as part of an ‘ecosystem’ of offerings to other apps, like PinDuoDuo who
integrate it fully in their experience and thus can tap into WeChat’s existing user base to acquire new
customers while WeChat gets the benefit of increased transactions outside the WeChat app.

These “ecosystem” or “hybrid” routes which the Chinese internet companies have taken has resulted in
an accelerated customer base & revenue growth.

In the US, this has played out differently. The big internet companies offer different apps for different
needs but either “fully own” or “control” a part of these apps. For example, Google lets you book
flights(google flights), watch videos (Youtube), do video calling (Duo) via different apps but owns them
completely. Consumers still need to download these apps individually and have a distinct experience on
each of them. Same is the case with Facebook, Instagram and Whatsapp, three distinct apps catering to
almost 3 different needs under the overarching umbrella of allowing people to connect socially.

But there are winds of change in the US. Uber has started food delivery branching out of their existing
ride hailing offering, AirBnB is venturing into ‘experiences’ beyond just accommodations, Instagram is
trying to integrate “shopping” by working closely with brands and influencers and Apple is venturing into
‘content’ and ‘credit’ but what is common amongst all of these examples is that they have chosen to
completely control the experience and hence deliver greater customer satisfaction and thus better
retention of users.

To put it succinctly, while China has taken the “​ecosystem​” route with big internet apps choosing to host
different partners or opening their own services to be used by other partners to unlock scale for all the
players in the ecosystem, US has taken the “​Fully controlled​” route with​ ​each App solving for one
consumer need completely and fully control the customer experience before moving on to something
else.
Flipkart today is at this crucial juncture. An internet pioneer in India looking to chart out its growth
strategy in a rapidly changing consumer landscape.
The questions confronting you today, for the purpose of this case study :

1. Looking at Global case studies, if you had to suggest to us, which route would you recommend
The ‘ecosystem’ route or the ‘fully owned’ or a hybrid of the two.
2. How will the chosen route translate on the demand side? What should Flipkart “be” for the
customers? Should they see Flipkart as a destination for everything they need or should there be
different apps within the Flipkart umbrella for their different needs?
3. Based on the answer to the first question, what should Flipkart do on the “supply” side? Does it
mean venturing into new verticals like OTT, travel tickets/bookings, financial services via
partners or fully owned? What does it mean in the supply chain side, should we work with 3rd
parties like Delhivery to scale reach and fulfilment centers or fully own the network to provide
the best experience to e-commerce customers? Should we scale the seller base by developing
easy onboarding to offer ‘local’, ‘regional’ and widest range of products to our customers or
continue to scale steadily while continuing to strongly guardrail quality?

Key Deliverables
In not more than 5 slides, answer the 3 questions.

● Recommend the right strategy for Flipkart. Bring in the relevant Indian context in your
recommendation. You may use current internet trends in India, global evolution of internet and
primary research to substantiate your view
● Demand side : How does your chosen strategy translate on the demand side? Provide 3-4 key
areas where and how this strategy will be deployed and provide a timeline view of
implementation and key customer metrics that it will move : Daily active users, Monthly active
customers, Repeats etc
● Supply side : Provide 3-4 key areas where and how the chosen strategy will be deployed. Provide
a timeline view of implementation with key supply side metrics it will move : Number of active
sellers/partners, Number of listings/products/hours of content etc
Please put all analysis, data points that have been used to arrive at your final recommendations
in the annexures.

Important Guidelines for the Idea

● Keep context and compatibility of Flipkart in mind while benchmarking best practices with global
companies.
● Implementation timeline should not exceed 1-2 years
● Depth of employee motivation understanding and business depth
● Consumer first and employee champion as the two key pillars to be considered while forming the
strategy
● Feasibility of the solution to be used even with company scaling up in future