`

Swami Keshvanand Institute of Technology,

Management and Gramothan

REPORT ANALYSIS ON FLIPCART

Title:Case study analysis report on flipcart

Name of the student: Jalaj Vijay
Program : MBA
Semester: 2
Roll no: 16
Course: MINI PROJECT
Submitted To: Dr. Ravish Pandey
 ACKNOWLEDGEMENT

I would like to express my special thanks to my Course

Faculty HOD Dr. Ravish Pandey and who gave me this
opportunity to work on this project “A CASE STUDY
ANALYSIS PROJECT REPORT ON FLIPCART” to get the
concerned knowledge and enhance my skills.
Also, I would like to express my special gratitude to my
college who has given me a lot of guidance to work on this
project.
Jalaj Vijay
MBA 2nd Semester
(2020-2021)
 CERTIFICATE

This is to certify that the thesis entitled, “A CASE STUDY

ANALYSIS PROJECT REPORT ON Flipcart”, being
submitted by Sonu Sharma to the Dr. Ravish Pandey Swami
Keshvanand Institute of Technology, Management and
Gramothan is a record of bonafide research work carried out
by her.

This is to certify that the above statement made by the

candidate is correct to the best of my knowledge.
Jalaj Vijay
MBA 2nd Semester
Roll Number- MBA-16
Date: 6th June,2020
ABOUT

Flipcart
Indian e-commerce company,headquartered in Bangalore, Karnataka,
India, and incorporated in Singapore as a private limited company.
The company initially focused on online book sales before expanding
into other product categories such as consumer electronics, fashion,
home essentials, groceries, and lifestyle products.
The service competes primarily with Amazon's Indian subsidiary and
domestic rival Snapdeal. As of March 2017, Flipkart held a 39.5%
market share of India's e-commerce industry. Flipkart has a dominant
position in the apparel segment, bolstered by its acquisition
of Myntra, and was described as being "neck and neck" with Amazon
in the sale of electronics and mobile phones.Flipkart also
owns PhonePe, a mobile payments service based on the Unified
Payments Interface.
In August 2018, U.S.-based retail chain Walmart acquired a 77%
controlling stake in Flipkart for US$16 billion, valuing Flipkart at
around $20 billion.

HISTORY
Flipkart was founded in October 2007 by Sachin Bansal and Binny
Bansal, alumni of the Indian Institute of Technology Delhi and
former Amazon employees.The company initially focused on online
book sales with country-wide shipping. Flipkart slowly grew in
prominence and was receiving 100 orders per day by 2008.[16] In 2010,
Flipkart acquired the Bangalore-based social book discovery service
We Read from Lulu.com.

The Progress of Flipkart

 

Flipkart’s Acquisitions
From 2009, Flipkart set up more centers in Mumbai and Delhi aside
from their center in Bangalore. The platform initiated its acquisition
binge from 2014  when it purchased Myntra for an amount of $400
million. Later in 2016, the platform set off to purchase the fashion
website Jabong for $70 million. In 2017, the company purchased the
payment website PhonePe as well as the e-commerce
corporation eBay.
 
The platform also consolidated all of its Bangalore offices to develop
a single big campus across 8.3 lakh square ft. In 2011, Flipkart set up
an office in Singapore. 
 
In 2018, Flipkart was acquired by Walmart with a 77% share of the
platform now possessed by the US retail giant. 
 
From the time of its launch till 2016, Sachin Bansal had reigned as the
CEO of Flipkart. From 2016 onwards, Binny Bansal took over as the
CEO with Sachin becoming the Executive Chairman. Presently the
company’s CEO is Kalyan Krishnamurthy, a Tiger Global
executive.
 
The largest revolutionary moment for Flipkart was definitely when it
was acquired by Walmart. The platform has witnessed a massive
degree of growth and advancement from the time it was started in
2007, prompting the emergence of various startups in the country.
The platform has been able to enhance its product categories from the
sole category of books to millions of items with a variety of sections. 
 
This has played an integral role in strengthening the belief of foreign
and national investors in Indian startups. As per recent news, reported
by TechCrunch,  Flipkart will acquire Walmart's Indian cash-and-
carry wholesale business as the e-commerce firm focuses on
enhancing its offerings for mom-and-pop stores.
 
Flipkart has also announced its introduction of Flipkart Wholesale as
part of the arrangement.
 
Recently the company has started a hyperlocal 90-minute delivery
service termed as Flipkart Quick in Bengaluru across categories
including grocery, mobiles, electronics, and home accessories.
Through this launch, the firm has ventured into items like fresh fruits
and vegetables, as well as meats and milk on its platform.
 
As per a statement by Flipkart, reported by the Economic Times, the
company recently crossed over 1.5 billion visits per month and
Claire 45% growth in its monthly active customers as well as
a 30% enhancement in transactions per customer for the fiscal year
2020.
 
 
VISSION

To become amazon of India

MISSION

Providing a delightful and memorable customer experience

OBJECTIVE

Completely hassle free shopping experience with best prices in india

A FLIP IN THE E COMMERCE PARADIGM. FLIPCART SUCCESS

STORY

It is hard to imagine that one small company can completely

transform the way we shop. But that's exactly what Flipkart has
done. In 2007, E-commerce was still considered a distinct
segment business and most Indians did their shopping offline.
The Internet was seizing the globe and Steve Jobs had just
launched the world’s first iPhone which was getting ready to
disrupt the complete smartphone industry in the years to come.
Two software engineers in India, Sachin Bansal, and Binny
Bansal did notice the changing dynamic of technology and realized
the potential of E-commerce. While there have been only 50 million
internet users in India at that time, they knew that with
smartphones coming into the image, it was only a matter of time when
more Indians will be connected to the net. They wanted to exploit this
chance to make an internet shopping platform that may take India’s
shopping experience to the next level.

Fast forward to today, India has over 570 million internet users, and
also the number of individuals shopping online has increased
significantly. What started as a two-man mission to make India’s most
trusted online shopping platform has transpired into Flipkart, which is
India’s leading E-commerce platform offering a list of 80 million
products across 80 categories to quite 100 million customers.
In this article of Verzeo startup stories, we'll examine the story of
Flipkart and the way Sachin and Binny were ready to build India’s E-
commerce industry from scratch.

How did the founders of Flipkart meet?

Before we start, you ought to know that if Sachin and Binny had been
better students, there was an honest chance that Flipkart would haven't
happened. Thankfully for us, they weren't.

Back in 2005, Sachin and Binny were pursuing their B.Tech from IIT
Delhi. While most students had gone home during the summer break,
Sachin and Binny were stuck in college as that they didn't complete
their projects on time. it was while performing on their projects within
the same lab that the 2 met for the primary time. On a side note, it had
been probably the most effective summer for Binny, although he
didn’t realize it at the time, but not only did he meet his future
business partner Sachin but also his life partner Trisha at the identical
lab.

However, Sachin and Binny only became friends. After their

graduation, they moved to Bangalore for their jobs together with a
pair of other guys from their college. At the time, Sachin was
functioning at a corporation called Techspan and Binny was working
with Sarnoff. Sachin had started working with Amazon in 2006 and
Binny followed him in Amazon later in 2007.

Origins of Flipkart
Soon the two got tired of their jobs at Amazon and began fidgeting
with ideas. Being fascinated with E-commerce, they decided to start a
shopping website where you can compare products. They planned to
make an internet site that will help users to check the prices of
products across different websites and help them get the most
effective value for his or her money.

As they started viewing different E-commerce websites, they soon

realized that online website experience was really bad. They knew
that they might never purchase from those poorly designed websites
and that they didn’t expect others to try to do that either.
The journey of Flipkart begins
As they started searching for vendors to list books on their platform,
they soon revealed that it had not been as easy as that they had
thought. People still failed to understand the internet and doing
business online wasn't something extremely popular, so most vendors
were highly sceptical and didn’t trust their business model.

However, the duo remained persistent and managed to convince some

vendors to require an opportunity on them. With vendors convinced,
they launched their website in October of 2007.
By the end of October, that they had received their first order from a
young techie named VVK Chandra who lived in Mahbubnagar in
Telangana (previously the state of Andhra Pradesh). Their excitement
from their first order soon made them anxious as their vendors told
them that the book was unavailable. After feverishly trying to find the
book all across Bangalore, the duo managed to urge hold of the book
and successfully delivered their first order.

With that order, Flipkart was officially in business., There were barely
any good E-commerce websites in India, and therefore the founders
wanted to put their customers first and also wanted to use technology
to provide them with a stronger shopping experience.

Their efforts to deliver their first order showed their commitment

towards their customers and it'd serve them well within the future.
Being a two-man startup, they took care of everything from
developing their website to delivering books. they'd managed to
deliver 20 shipments in 2007 itself.

Within six months the startup was operationally profitable and in

2008, that they had moved into a 2BHK apartment in Kormangala,
which might function as their office for the approaching years.
Slowly, their business began to boom and by the end of 2009, Flipkart
had managed to sell books worth ₹4 crores.

Flipkart was successful with book lovers and investors were getting
down to mark. In 2009, Flipkart got its first capital investment of $1
million from Accel Partners, a renowned investment firm. By the top
of 2009, the startup already had over 150 employees and three offices
across India.

In such a brief span of your time, Sachin and Binny had managed to
grow their company at an incredible pace and that they had also
developed their personalities as entrepreneurs. Sachin was good at
dreaming big and was the person behind ideas and vision of Flipkart,
while Binny, a shy individual was called the operations guys. They
had found in one another an excellent partner who complemented
each other’s skills. Whatever Sachin dreamed, Binny made it a reality.
India’s E-commerce was still a distinct segment business and an
oversized population was still hesitant to buy online. However,
Flipkart had built a brand of trust among its loyal customers and
continued to instil confidence by providing 24×7 customer support
and their growth continued. But things were changing drastically,
once

Tiger Global came on board as their new partnership with its first
investment of US$10 million in 2010.

Now that Flipkart had already become a platform of choice for book
lovers in India, the startup was able to take its next step. With new
partners and more investment, Flipkart was able to dive into the
electronics category. So they started selling mobiles in 2010.

But months went along and while book sales continued to grow,
mobile sales remained stagnant. it was clear that customers were
willing to pay small amounts of cash like 500 rupees online but they
weren't quite able to pay large sums of cash like Rs 10,000 or 15,000
for mobiles without first touching and feeling their products,
something which they had readily available in brick-and-mortar
shoes.

Flipkart still had gathered enough fame to build that quantity of trust
among its customers. This problem forced the founders to think
differently. and that they were ready to come up with a superb idea of
introducing Cash on Delivery. Flipkart was among one among the
primary E-commerce startups to introduce cash on delivery option for
its customers.

The founders were hell-bent on building trust among Indian

consumers and that they doubled down on their dream by introducing
no questions asked return policy and followed it up by a replacement
policy. They were willing to sacrifice growth for customer
satisfaction.

Today, these three features are offered by every E-commerce website

in India but it had been extraordinary back in 2010 or 2011.
Customers loved these options as they offered them flexibility in
paying and buying products on their terms. due to Sachin and Binny,
Indians who were scared of shopping online were now warming up to
the present novel idea of online shopping and getting the products
delivered right at their doorsteps.

Now a bit like offline shopping, that they had the choice of either just
returning the merchandise if they didn’t prefer it or get a whole
refund. This was a game-changer and Flipkart’s sales began to grow
even quicker then they'd ever grown. From merely ₹4 crores in
revenues within the twelve months of 2009, Flipkart expanded its
revenues to ₹75 crores by the top of the fiscal year of 2011, growth of
18.75 times more than the previous occasion.

Soon there was no stopping Flipkart, they'd cracked the code to Indian
consumers and broke the hegemony of brick-and-mortar stores. They
continued expanding across categories and money came pouring in
from investors. By 2012, Flipkart had already become a unicorn, the
second in India after InMobi.

The term “Unicorn” only became popular after it was coined in 2013
by Aileen Lee, who is the founding father of Cowboy Ventures.
Flipkart became a corporation that other startups would hunt within
the coming years, while Sachin and Binny became the face of India’s
growing startup ecosystem.

Competing with Amazon

Flipkart was the undisputed leader of the E-commerce space in India.
the corporate was a giant reason for enabling several customers to buy
online. However, things were to change with the entry of another E-
Commerce giant, Amazon, in 2013.

Aside from Amazon, Flipkart had to also contend with another Indian
E-commerce startup Snapdeal. While Snapdeal was still small
compared to Flipkart, Amazon was proving to be a force to reckon
with. It became a battle of David vs Goliath.
This failed to deter Sachin and Binny, as they knew their customers
better and had built a brand of trust which was supported by their
technology platform that had been built over years of customer
feedback. Their confidence was shared by their investors who helped
Flipkart raise nearly $2 billion in 2014 alone. one amongst their oldest
investors Tiger Global and Accel continued to place their faith within
the company.

Armed with a $2 billion monetary fund, Flipkart acquired Myntra in

2014 to expand into fashion E-commerce. Later in 2016, Flipkart
acquired another fashion E-commerce startup Jabong to scale rapidly
in online fashion commerce. This proved to be a sensible move by the
founders as they realized they were at an advantage acquiring two of
the leading flash-fashion platforms instead of building one on their
own, which might have cost them time and money.

With Amazon competing for the market in India, Flipkart didn’t have
the luxury of your time that it had during the first days. due to that
acquisition, Flipkart is now a pacesetter in fashion E-commerce space
with over 60% of market share.

Flipkart’s ability to grasp the Indian market and also the experience of
their founders and team in creating a corporation from the bottom had
given them the advantage over Amazon which helped them to remain
competitive and sooner than Amazon.

As of 2018, Flipkart remains India’s leading online retailer with a

market share of 31.9%, compared to 31.2% of Amazon. After adding
the sales of Myntra and Jabong, Flipkart’s total market share increases
to 38.3%.
MARKET DEMOGRAPHICS
GEOGRAPHIC:
CATERS TO TIER 1, TIER 2 AND TIER 3 CITIES
USAGE RATE:
•Third largest internet user base of 124 million (10% internet
penetration)
•India’s mobile user base is 87.1 million and is expected to
double by March 2015 .Flipkart projects its sales to reach INR
10 billion by year 2014.
•On average, Flipkart sells nearly 20 products per minute and is
aiming at generating a revenue of INR 50 billion (US$1 billion)
by 2015.
•Flipkart has 10 million registered users; about a million visit
the site every day.
•The users of age 15-34 years are most susceptible to changes
in purchase/consumption behaviour. AGE GROUP:
•Youngest online demographic globally .
•75% of online users between the age group of 15-34 years.

MARKET GROWTH:

•Current size of e-commerce market in India $11.2 billion

•360 e-commerce portal offering services in India (tripled since
2010)
• Internet users in India is expected to grow to 376 million by
2015.

MARKET TRENDS:

SALE OF DIFFERENT PRODUCTS CONTRIBUTION 9%

23% TIER 1 40% 51% TIER 2+3 RURAL 48% ELECTRONIC
GOODS BOOKS 29% LIFESTYLE AND ALLIED
PRODUCTS
STRENGTHS

Industry condition: very high potential .Investor’s trust .Services and

warehousing .Payment options .Established brand

WEAKNESS

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 .Middle management
retention issues.

Development of m-commerce in the e-market

OPPORTUNITIES

Increasing internet penetration .Target social medias to reach

young population .High interest among VC/PE. .High
competition from major international online retailers .Capture of
alternative market by competitors e.g.Infibeam

Amazon.com/ Amazon.in • Junglee.com. • EBay • SnapDeal •

Jabong.com • Homeshop18 • Yebhi.com

Key success factors:

•First mover advantage

•Experience of E-commerce industry
•Investments
•Cash on delivery
•Customer orientation
Points of parity:
1. • 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 • Flipifts • Academic related books Points
of Difference: •Flipkart membership cards for premium
customers •E-wallet •Vernacular language •Better user
interface-one drag approach.

2. “Bookstore at your door” “The store at your door” “Jo dikhta

hai wo bikta hai” “No kidding, no worries” “Shopping ka naya
address”
3. Product Price Promotion Place Process People Physical
evidence
4. Aims most segments except automobiles and groceries.
FICTION ACADEMIC LITERATURE CHILDREN
ELECTRONIC GOODS HOUSEHOLD ELECT. MOBILE
TECHNOLOGIES PERIPHERALS,WELLNESS APPARELS
ACCESSORIES Suggested: Flipifts, bottoms up, extended
range of academic books

PRICE:

Offers discount •E-wallet •E-gift vouchers Suggested: • membership

cards with points facility

PROMOTION:

•Advertising
•Online marketing
•Media
•Word of mouth Suggested:
•sponsorships
• e-wallet promotion
• themes of advertisements concentrating on different services
provided.
PLACE:

Inventory at 4 major centers Mumbai, Delhi, Bangalore, Kolkata

PROCESS:

•Cash on delivery
•Delivery services through e-kart and postal services
•Delivery time •Covers all tier-1 cities and major tier-2 and tier-3
cities
•Debit and Credit card transactions
•Payzippy safe payments •Suggested: Vernacular language

PEOPLE:
Customer services
•Investors
•Employees PHYSICAL EVIDENCE:
• The packaging and quality of product •Prompt delivery •30 day
return policy Suggested- Better user interface, IP tracking for Flipifts

The Business Model Of Flipkart

Flipkart, which has redefined shopping in India, works on a B2C

(business to consumer model). Flipkart started off with a direct-to-
consumer model selling books and some other products, before
turning to a marketplace model which connect sellers and buyers and
expanding its catalogue. Today, it sells everything from smartphones
to clothes to furniture refrigerators to FMCG goods — and yes, books
too.

Flipkart claims to have lakhs of sellers on board from across India

who list their products in over 80 categories. The average consumer
might not care who the seller is and has a relationship with Flipkart,
whereas the seller who may not have reached the customer at all can
now do so thanks to Flipkart’s platform. To facilitate this transaction
and fulfil the order, Flipkart charges a varying percentage as a
commission fee from the seller.

Flipkart Revenue And Losses

Flipkart earned INR 30,164 Cr in revenue for FY18. The company

also multiplied its losses fivefold reaching INR 46,895 Cr.

The major expense which increased the losses for the year ending
March 2018 was finance costs, mostly under “fair value loss on
derivative financial instruments”, which increased nearly tenfold to
INR 40,937 Cr in FY18 from INR 4,309 Cr in FY17.

Flipkart has also recently introduced private labels such as MarQ and
SmartBuy, which sell products in various categories. One of the
biggest contributors to Flipkart’s annual revenue is the customer
footfall and activity during its big sales with huge discounts around
festivals such as The Big Billion Day.

In recent months, this discounting has come under the government

scanner and this could impact the company’s revenue in the long-
term.

Other Sources Of Income For Flipkart

 Seller Commission: Flipkart charges a commission from the

sellers since it provides a platform for sale for them
 Convenience Charge: Flipkart charges a convenience fee to the
buyers for faster delivery
 Logistics: E-Kart is Flipkart’s logistics company and facilitates
the fulfillment of orders from sellers to buyers through its
logistics arm. It charges a fee from the sellers for the same.
There is no standard charge levied as it changes according to the
geography
 Advertisement: Flipkart sells advertising space to companies
on its website. This offers a leverage to the companies buying
 the advertising space as they are presented first to the millions
of customers visiting the Flipkart website daily
 Media Buying: Flipkart releases ads for certain brands in the
popular newspapers, radios, televisions, etc, In doing so,
Flipkart charges a sum from the brands that it advertises for.

Flipkart Goes Beyond Ecommerce

In 2016, Flipkart acquired a fintech company called FxMart and

released a payments service called PhonePe. PhonePe offers a UPI-
based payments app as well as support for billing, recharges,
ecommerce and other online services. As per the UPI data released for
August 2019, PhonePe was the leading app for UPI payments in
India.

Post the acquisitions by Walmart last year, Flipkart has increasingly

turned to hybrid or omnichannel sales model. It recently opened a
FurniSure experience store to help customers touch and feel the
furniture products before making the purchase.

Conclusion
Even though the founders needed to leave Flipkart, we should not
forget that Flipkart wouldn’t have reached where it is today without
the long-run vision and determination of Sachin Bansal and the
operational skills of Binny Bansal who worked at making Sachin’s
lofty dreams a reality.

So what's it that these founders did right that the majority of

entrepreneurs do wrong? Firstly, it's clear that Sachin and Binny
always put the wants of their customers first. They knew from the
word-go that Indian customers lacked trust in E-Commerce websites.
They built the trust of their customers by understanding their needs
and giving them exactly what they wanted. They already had an
engineering background, which helped them built an internet site that
was better than their few competitors and which only improved as
more feedback they got from their customers. Things were kept
simple for the shoppers by introducing options like cash on delivery,
replacement, and refund policies.

Apart from prioritizing their customers, they had kept Flipkart

profitable before they explored for outside investment. During the
primary two years, they'd grown Flipkart out of the revenues they
generated from their sales. They proved to their investors that this was
a sustainable business, which made it easy for them to urge
investment. This approach is different from most entrepreneurs, who
go searching for investment before they even test their business
model.

Flipkart had its own set of failures but that didn't deter the founders to
take a step back and take stock. They kept on experimenting until they
found the winning formula. It was their persistence and the ability to
bounce back from failures that helped them discover new and
innovative methods to keep building and enhancing Flipkart.

Today, Flipkart may be a huge company with massive revenues and

thousands of employees. However, Sachin and Binny are still two
passionate engineers who are just searching for new problems to
resolve, irrespective of the fact that their journeys have taken them on
different roads after a decade of building Flipkart.
 REFERNCES:l

BOOKS

GOOGLE

BLOGS

WEBSITES:

WWW.FLIPCART.COM

WWW.WIKKIPEDIA.COM