Flipkart Case Study- Business Model and Marketing Strategy

When it comes to online shopping or e-commerce businesses, in recent years various platforms
have evolved. Some of the most widely used sites for online shopping are Amazon, Flipkart,
Myntra etc.
One of the primary reasons for the popularity of online shopping is convenience. Shoppers can
browse and make purchases from the comfort of their homes using computers, smartphones,
or tablets. There is no need to visit physical store hours to consider, making it accessible 24/7.
How Flipkart Originated
Flipkart, an e-commerce company was founded in the year 2007, by Mr Sachin Bansal and
Binny Bansal. Both were alumni of the Indian Institute of Technology, Delhi. They had been
working for Amazon earlier. With a desire to start something new and of their own, they
launched Flipkart with a capital of Rs. 4 lakhs. The plan was simple – customers would place
an order for books online through Flipkart and would receive them at their doorstep
Now, Flipkart functions entirely in India, with headquarters in Bangalore, Karnataka and
earning 4500 crores annually. In no time, Flipkart also started offering other products like
electronic goods, stationery supplies, fashion, home essentials and groceries.
The company now gives employment to around 5000 people. It has a consumer base of
approximately 2 billion people and the company claims to deliver more than thirty thousand
parcels per day.
Currently, Flipkart stores its products in its warehouses across the country. They have a delivery
network across 27 cities. It helps the company to deliver orders to their customer within an
appropriate time.
With passing time, internet penetration has grown across the world, hence it also acts as a
booster for e-commerce platforms as it provides a secure payment option to customers.
What led to the growth of Flipkart was increasing internet connectivity in rural and urban areas.
Availability of a wide range of products from anywhere and that too at the customer’s doorstep
with feasible and affordable prices.
Equipped work schedules of the young population led to more online and indoor shopping
which eventually helped Flipkart grow at a faster pace.
Though, Flipkart currently faces tough competition from Amazon, what remains is the main
objective is to create a unique image in the consumer’s mind.
After having an idea about the company’s evolution and how it created its own space in the
Indian e-commerce markets, let’s dive deep into what are the marketing strategies that Flipkart
adopted.
Marketing strategies of Flipkart
1. Product:
The company generally offers its customers with wide range of products. It deals in almost all
segments except for automobiles. Flipkart has recently started a grocery store to increase its
market share.
The major reason Flipkart for being the most used app for online shopping is that the app is
user-friendly which gives the user a phenomenal experience while browsing.
2. Pricing:
The company provides several filters for the products as per the price range selected by the
customer, and easy payment options. Flipkart was the first company to provide. cash on
delivery option to its users in the year 2010. The products are delivered on time and are of good
quality since they are packed with utmost care to avoid any sort of damage.
The 15-day exchange policy of the company gains consumers’ confidence in buying products.
Recently launched pay later option with a minor convenience fee, helps the customer to easily
convert their buying into EMIs. The company also offers exclusive discounts and price drops
on the occasion of Indian festivals and sales.
3. Promotion:
Flipkart can target every age group of audience irrespective of what product they are looking
for online. The smart marketing strategy of Flipkart grabs the attention of its viewers who hold
the power to buy and are aware that online shopping is better than offline shopping since it
provides them with much better options to explore than any retailer would ever give them.
You must have heard about the term SEO; it stands for search engine optimisation.
Now what exactly is SEO It is a set of strategies and practices used to improve a website’s
visibility in search engine results pages like Google, Bing, and Yahoo. The primary goal of
SEO is to increase non-paid traffic to a website and boost its overall online presence.
As per the latest findings, Flipkart tops the online search results with a total of 55.6 million
searches, out of which 11.3 million were mobile searches and 44.3 million were desktop
searches. Also, when it comes to SEO, the loading speed of the site plays an important part
since it will decide if the users will visit your site or not. Flipkart does this job great. It just
takes 2 seconds for the site to load the content for its consumers.
To promote the app Flipkart has also collaborated with various Indian celebs who act as
influencers for people who search for online products.
4. Advertising campaigns launched by Flipkart
One of Flipkart’s most significant annual sales events is the “Big Billion Days.” Flipkart runs
wide-ranging marketing campaigns, offering discounts and deals across various product
categories. These campaigns feature engaging advertisements to build eagerness and attract
customers.
Flipkart ran an advertising campaign centred around our toddlers and teenagers —a voice
search for kids. The campaign showcased how kids could use their voices to search for toys
and other products on the app, making it easier for parents to shop for their children.
Flipkart often runs campaigns emphasizing mobile phone exchange offers, encouraging
customers to upgrade their phones by exchanging their old ones. These campaigns ensure that
consumers should get cost-efficient and best deals.
Flipkart introduced “Flipkart Plus,” a loyalty program offering benefits such as free and faster
delivery, early access to sales, and reward points for regular customers.
Flipkart’s marketing team has a great quality of analysing consumer behaviour and based on
this, they started a sort of advertising campaign which you guys must have seen while scrolling
through the app, “Frequently Bought Together”. In this Flipkart suggests the buyer the product
which is frequently bought by the audience.
There are various other marketing strategies that Flipkar̥t tries to implement to promote the app
globally.
By now our readers must have got an idea why Flipkart holds an essential place in the market
and gives tough competition to Amazon.
Cashing on the Cash On Delivery Payment (COD) option
Flipkart was among the first major e-commerce players in India to introduce the cash on
delivery option for its customers in 2010. There are many reasons as to why cash on delivery
plays an important role in the e-commerce sector. For instance:
Helps develop a sense of trust
When Flipkart started operating in the country, it knew that people will be doubtful about any
kind of scam or loss if they stuck to prepaid orders. So they introduced cash on delivery (COD)
payment option so that people can place orders with trust, without any fear of losing money.
No dependency on payment cards
This point is especially valid for deliveries in rural or sub-urban areas, where people still rely
heavily on cash for any kind of transaction.
Allows some time to gather money for payment
Sometimes e-commerce companies like Flipkart launch exciting offers which are very hard to
ignore for people fond of online shopping. Choosing cash on delivery gives them some time to
gather cash so that they do not miss out on the limited-time offer.
The Challenges faced by Flipkart
The term e-commerce was almost unknown when Flipkart launched its ambitious startup.
Many market experts dismissed online shopping as a western concept, stating that Indian
customers wanted to ‘touch and feel’ whatever they buy. Here are a number of challenges that
the company came across in its long journey:
Supply Chain and Logistics
In order to procure products from thousands of sellers, maintain inventory and ensure timely
delivery, an effective supply chain and logistics network was the first challenge that Flipkart
had to endure.
Reverse logistics is still a major issue for the company as more than 15% of shipments are
returned by customers for a number of reasons. These bring huge losses to the company.
Managing Inventory
Flipkart has major warehouses across many cities, especially metropolitan areas, such as
Bengaluru, Mumbai, Kolkata, Chennai, Delhi, Noida, and many other cities. Furthermore, they
have small regional distribution centres in over 600 locations. With Flipkart’s “F-Assured”
program, you can expect to get quality products delivered as the company practices strict
quality checks before shipping any item from its warehouse.
Cash On Delivery Issues
COD does have many benefits for customers, but it indeed puts burden on e-commerce firms
such as Flipkart. Many customers return the product without paying; and the company ends up
losing all the money spent on procuring, storing and shipping the product. That is why prepaid
payment options are always favourite among sellers listed on Flipkart.
Managing vendors and Logistics Provider
Managing lakhs of sellers on a platform is a herculean task in itself. Added to that is the issue
of managing all logistics service providers (LSPs), if the company is dependent on 3rd party
services. Flipkart, however, has its in-house logistics company, named Ekart, which ensures
smooth and on-time deliveries.
Funding Issues
For any startup to prosper, a continuous flow of funds is a must. These funds not only aid
improving existing services and facilities but also help the companies to bring new, innovative
ideas to reality. Fortunately for Flipkart, there hasn’t been any shortage of funds, as seen in the
timeline mentioned above.
Tough Competition from rival Amazon India
When Amazon entered the online shopping market in India in 2013, many experts feared that
it may attract Flipkart’s loyal customers with great service, offers, international brand value,
video streaming services and no shortage of funds. However, despite Amazon being a threat,
Flipkart is still the largest online retailer in India as of 2019 with a market share of 31.9%,
while Amazon India is following closely with a share of 31.2%.
The festive season in India often becomes a hot battleground for these two giants as they offer
great deals to customers in the form of Flipkart Big Billion Days and Amazon Great Indian
Festival.
Changes in Leadership
Co-Founder Sachin Bansal quit as the CEO of Flipkart in 2016, presumably due to
performance-oriented issues. He was succeeded by Binny Bansal as the former took over the
position of Executive Chairman.
In the year 2017, Kalyan Krishnamurthy took charge as the new CEO of Flipkart. He was
previously an executive in Flipkart investor, Tiger Global. Upon Krishnamurthy’s appointment,
Binny Bansal became CEO of the entire group which includes portals such as Myntra-Jabong,
PhonePe and logistics company Ekart.
Flipkart Acquisitions
Flipkart bought online apparel portal Myntra for roughly $300 million in the year 2014. Two
years later, they acquired online fashion retailer Jabong in a deal worth $70 million.
The same year Flipkart acquired digital payments startup PhonePe. It also acquired Ebay
India in exchange for an equity stake. Ebay also agreed to make a $500 million investment in
its business before handing it over to Flipkart in 2017.
The Flipkart reward program – Flipkart Plus
Whenever you shop on Flipkart, the company rewards you with 2 Super Coins for every 100
rupees spent. As soon as you collect 200 Super Coins, you can use them to become a plus
member – and the best part is that the coins will not be deducted. You can use these coins to
get heavy discounts on Flipkart products and other products and services offered by partner
companies. With Flipkart Plus membership, the company offers you the following benefits:
• Free and Fast Delivery
• Early access to big billion day sales
• Redeem coins for rewards
• Superior customer support
Flipkart Failures
Failures are meant for growth. If a company does not embrace its failures as much as
its successes, they are bound for long-term loss. Flipkart too has had its fair share of failures,
which have been listed below:
Flyte
Flipkart tried to get into the online music streaming business in 2011. For this purpose, they
acquired a digital content platform named Mime360. Flyte was launched in the year 2012;
however, with tough competition from existing portals offering free services and the problem
posed by piracy, Flyte had to shut down in 2013.
PayZippy
Before Flipkart acquired PhonePe, it tried experimenting with a payment gateway named
PayZippy in 2013. The project failed miserably as the payment gateway was unable to bring
merchants on-board. It was shut in 2014.
Going App-only for mobile users
In order to push mobile users to download their apps, Flipkart blocked them from accessing
their website and prompted them to download the app. The move was apparently backfiring
and therefore Flipkart had to reinstate the mobile website.

CONCLUSION
Flipkart’s business model depends on simplifying transactions between buyers and sellers,
charging fees for various services, and constantly inventing to improve the customer experience
and seller support.
Flipkart operates as a recognized e-commerce platform in India with a business model that
revolves around being an online marketplace. It connects a wide range of sellers with
consumers, offering diverse products and services. Flipkart’s marketing strategy is essential in
establishing its brand, attracting customers, and maintaining a competitive edge in the e-
commerce industry.