Why Is Flipkart India’s Leading E-Commerce Player?

Flipkart is India’s biggest e-commerce company by sales. The company hit a billion dollar in sales, a year ahead of schedule and was valued a massive $2.5 billion in the last round of funding it raised in May; the latest valuation figure doing the rounds is  $5 billion as it gets ready for a possible American listing.

All these figures mean one thing – Flipkart is a big time player in the world of e-commerce.

Back in May, the company announced its 100% acquisition of e-retailer Myntra in a deal that is estimated to be worth around $300 million which is approximately Rs. 1,800 crore. This, industry experts believe, was done to get Flipkart battle ready to fight Amazon, which is positioning itself for rapid growth in the extremely fertile Indian e-commerce market.

Amazon is the world’s largest online retailer, but if it thought it would own the Indian e-commerce market without a fight, it didn’t figure on Flipkart, fighting tooth and nail to ensure it doesn’t cede its e-commerce leadership space to Amazon.

The fact is that Flipkart has always been a trail blazer looking to cement its leadership position in the Indian e-commerce market. Right from the time it launched its operations as an online bookstore in 2007, the company has been enhancing its user experience and the use of technology to keep itself ahead of the pack.

Flipkart is essentially a text book example of how e-commerce businesses can keep improving their services to meet the demands of customers and stay ahead of competition.

Take a look at some of the reasons why Flipkart has always stayed ahead of the curve and become almost unbeatable in the Indian e-commerce market:

It Made the Prospect of Shopping Online More Acceptable

Seven years ago, when Flipkart started its operations, Indian consumers were not comfortable with the very idea of shopping online. The use of internet was still limited to the large metros and even regular internet users had doubts about sharing their credit card information with an online retailer.

The company realized this was a typical Indian problem and won’t sort itself out. It found an effective solution in the form of Cash-on-Delivery (CoD). It allowed customers to buy online and pay in cash when they received the payment.

No, Flipkart was not a pioneer in offering CoD to customers but it arguably was the first company to use this concept sustainably; this payment option became an intrinsic part of fuelling the company’s business growth early on, and continues to be, till date.

So how did it make it viable? That’s our next point.

Building Infrastructure

Very soon Flipkart started using its own delivery services to ensure faster delivery of products and the secure acceptance of cash. They did not want to depend on a 3rd party provider to collect cash for them and thus compromise on the security of the parcel and the cash paid by the end customer.

This is the time the company faced a collection of infrastructural problems as India, unlike the US, does not have a standardized street address system. Locating a house for the delivery personnel, many a times, is not easy. Offering CoD is one thing, but what happens when the customer isn’t home to receive the package and make the payment?

Enter the use of technology.

The engineers at Flipkart developed a system that enabled the company to zero in on the best warehouse locations; it has six of them right now and is building more in tier II cities.

This allowed Flipkart to break new ground in offering an excellent shopping experience to target customers. The company improved its delivery system and it now keeps the customers updated by text messages several hours before the delivery reaches their home/office address. Flipkart even has a whole section that is dedicated towards improving the final stages of the delivery process, right from the time the order leaves the warehouse to the time it reaches them.

Continuous On-Site Improvements

One of ways Flipkart keeps its online retailing business at the top of the consumer’s mindshare is by offering a highly satisfying shopping experience. The website has simple easy-to-use navigation, offers large product images, detailed product information and a slew of other user experience features that come together to make the purchase process fast and extremely convenient.

What it also offers its users are certain special features like the opportunity to sign up for a program called Flipkart First. It is a concept that turns an ordinary Flipkart customer into someone, who gets a collection of privileged services from the portal including free in-a-day delivery, priority customer service and others.

Also, customers can track their orders by entering their email and order ID. This and many other features make Flipkart the first choice of customers who want to shop online.

What online shoppers are looking for from an e-commerce site is credibility and convenience. This e-retailing giant has these qualities in abundance.

Leveraging the Potential of Mobility

Mobile users are one big reason why India’s e-commerce industry is booming. Flipkart has taken advantage of this scenario by launching apps for the Android and iPhone. This is yet another example of the company making good use of technology for not only enhancing the shopping experience for its target audience but also boosting its sales figures.

According to Sachin Bansal, the co-founder and CEO of Flipkart, the company will primarily be an m-commerce company in the next 2-3 years. You can also go through an interview of Saran Chatterjee VP- Products of Flipkart to get a detailed look at the company’s mobile strategy.

What there is no doubt about is the company’s focus on technology as a means of getting ahead in what already is a very saturated and competitive market. It is planning to invest big money in technology and has the confidence this move will deliver tremendous returns on investment.

Satisfying Intrinsic Indian Needs to Improve Shopping Experience

Flipkart now enables overseas customers to buy products for their friends/family in India. It now supports international credit cards with the help of Visa’s CyberSource. This could be regarded as the first step in the company’s plan to go global, but it is important to see this move from the ‘shopping experience’ prism as well.

The Indian diaspora is spread across the world, many of whom want to buy a gift for their loved ones in India on festive and other occasions. The problem is that it might not always be possible for these people to come to India to be a part of such celebratory occasions and share gifts with their friends and family.

Flipkart has used this particular problem as an opportunity to boost sales. By accepting international credit cards it not only satisfies the needs of a person living outside India to buy and send products to people living in India, but also improves its own profitability.

The reason why Flipkart has done so well consistently is that it has realized the need to mold its services to meet the typical needs of an Indian buyer. The company has time and time again brought out services that cater to an Indian ethos. It has reimagined e-commerce from the perspective of an Indian consumer, and not copied what players like Amazon and eBay have been doing.

This is why it’s the leading e-commerce player in India and there is every indication that it will not relinquish its leadership position any time soon.

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