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1. Macro Level Current Business Environment
In the past few years, India has proved to be nectar for major MNC‟s around the world. With
favourable policies, India is one of the most favourable destinations for FDI.
Opportunity in Current Business environment
India Economy
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Among the poorest countries in terms of per capita income
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But:
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High growth rate (but low agriculture growth rate)
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High investment/savings rate
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Low share of agriculture in GDP (but high services share)
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More diversified industrial structure
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Foreign exchange constraints – less binding?
Strengths of Indian Economy
High GDP growth rate
High growth in merchandise exports (though imports grew even faster)
High growth in services trade
High capital flows
Not affected much by the global crisis
Overall positive outlook for India
Weaknesses of Indian Economy
Imbalance between Agriculture, Industry and services becoming more acute
Inequality is growing- in different spheres
Human Development Index remains low in spite of growth.
Inflation becomes a major problem
Food security threatens to becoming a problem
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Major Issues of concern for India
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More than 50% of population depend on agriculture but low growth rate
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Jobs in organized sector have not increased despite industrial and service sector
growth
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Inter-state disparity
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Poverty has declined but at modest rate
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Malnutrition has decreased but magnitude still very high
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Poor health, education, clean drinking water, sanitation – very low HDI
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2. Current Retail Online Industry
Compared to the more mature and far bigger online retail markets in the U.S. and Europe, India’s ecommerce sales are relatively small. They are estimated at about $1.6 billion by market research
firms such as Forrester Research Inc. and some Indian e-commerce venture capital firms.
But the Indian direct-to-consumer e-commerce market is likely to double in size to more than $3
billion within three years, and could grow to reach $15 billion by 2017. India’s online customer base
of around 20 million shoppers could increase as much as 1400% and reach 300 million shoppers
within 10 years. “It’s an exciting time to be in e-commerce in India, because even though the
market has been developing since 2000 it’s still very early on in the development stage.
Secure payments processing remains a challenge, order fulfilment and package delivery to 60% of
the Indian population that lives outside of major cities such as Mumbai and New Delhi is
problematic, and India has a very low percentage of consumers with a credit or debit card
compared with other countries such as the U.S. and Europe. On the plus side, the number of Indian
consumers with a smartphone connected to the mobile Internet could approach 220 million within
the next 10 years
Today the Indian online retailing market has thousands of individual e-commerce sites and only
about 80 well-known online retail companies such as Flipkart.com, a six-year old web-only mass
merchant with annual sales of about $100 million.
Catering to Indian consumers that connect to the web via mobile phones will be key to e-commerce
success in India. India’s emerging base of online shoppers will be consumers age 25 and under with
web-enabled smartphones who are active users of social media. India has one of biggest bases of
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Facebook Fans in the world. There are 62.7 million Facebook users in India, representing 68% of the
country’s online population, according to SocialBakers, which tracks activity on social networks.
In addition, the online shopper base in India will be increasingly females who will shop with
increasing frequency online. Today the average consumer in India who shops online may do two or
three transactions per month. In just a couple years as the market grows and matures, the average
online shopper could be doing more like four to five transactions per month.
During a keynote speech at eTailing India Expo, Matrix Venture capitalist Bajaj told attendees that
venture capital funding of Indian e-commerce companies, especially smaller start-ups, is improving.
“The good news is that India now has 15 or so seed funds to invest in smaller start-ups,” Bajaj says.
“It’s a good time to be bullish on e-commerce in India.”
Major Trends – Retail Industry
Retail Sector growth rate last Year in the world - India as second
China - 10.7 % , India - 9.4 % , Russia - 6.7 % ,Brazil - 3.7 % , UK - 2.8 % ,
Japan - 2.3 % ,US - 2 %
60% of India’s population is under 24 year’s age.
600-700 Million (Generally rural People) affords simple industrial products e.g. bicycles,
radios, textiles etc. (60% Indian Population - Common lower middle Class)
250-300 Million afford goods like Refrigerators, Scooters and Color TVs. (25% India
Population - Middle Class)
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70-80 Million affords Cars, Private healthcare, Foreign travel etc. (7% India Population Rich or Upper Middle Class)
5-7 Million Super Rich (less than 1% India Population)
70-80 Million (7% India Population Poor - Hardly buy stuffs)
Drivers for Indian Retail
Customer value drivers are continuing to fragment as a result of changing demographics
and value systems.
Consumption expenditure is 60% of India’s GDP.
High Income opportunities
Service Sector creating new jobs.
Working Population will rise 70% each year.
IT Industry increasing professional opportunities.
Rising Salary Levels.
MNCs entering India and homegrown companies going global.
Changing Attitude
From Save to Spend Nature, emphasis on personal life style
Nuclear Family
High disposable family income structure on a rise
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DINK (Double Income No Kids)
Multi Income families
International Exposure
Exposure to global trends
International travel
Necessities to Life Styles
Shift from basics to Life Style products
Increase in spend on Apparel, Personal Care, Entertainment
Credit Boosts retail credit Cards
Market & Government
Easing out on Import barriers
FDI
Fluid retail segments
M-Commerce and E-Commerce boosts retail
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3. Executive Summary of FlipKart
Flipkart went live in 2007 with the objective of making books easily available to anyone who had
internet access. Today, FlipKart present across various categories including movies, music, games,
mobiles, cameras, computers, healthcare and personal products, home appliances and electronics,
stationery, perfumes, toys, apparels, shoes – and still counting!
Be it our path-breaking services like Cash on Delivery, a 30-day replacement policy, EMI options,
free shipping - and of course the great prices that FlipKart offer, everything we do revolves around
our obsession with providing our customers a memorable online shopping experience. Flipkart
delivery partners work round the clock to personally make sure the packages reach on time.
Flipkart is a leading destination for online shopping in India, offering some of the best prices and a
completely hassle-free experience.
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5. FlipKart Organization Structures and Leadership Team
Participative and corporate Leadership.
Sachin Bansal, CEO and one of the co-founders of Flipkart
Binny Bansal other co-founders of Flipkart
India‟s largest e-tailer which clocked sales (our guess of gross merchandise value or
GMV) of Rs 500 crore (factoring out the recent ups and downs in forex rates, around
$100 million) in FY2011-12, a ten-time increase from FY2010-11. The key to
success has been the execution and that essentially means the people working for
Flipkart. Currently, the company has on board a 4,800-strong team.
Ravi Vora (joined in March 2011), VP (marketing), seems to be the right hand man
of the Bansals. This IIM-Bangalore alumnus has been instrumental in setting up the
marketing function and spearheading the positioning and branding strategy of the
company. The „Fairy tale‟ and „No kidding, no worries‟ ad campaigns have given
„Brand Flipkart‟ a considerable push/facelift both in terms of revenues and customer
base.
Mekin Maheshwari (since Sept 2009), president (engineering) at Flipkart.com, is
responsible for leading the engineering team, scaling up Flipkart‟s business at a rapid
speed. His LinkedIn profile says, “I help make e-commerce happen in India.” A
bachelor of engineering in Information Science from Visvesvaraya Technological
University, Maheshwari had earlier worked with Yahoo!, Ugenie and Lulu (post its
acquisition by Ugenie).
Ankit Nagori (in Flipkart since 2010), VP (categories), is an IIT-Guwahati alumnus
who heads multiple categories and helps the e-tailer build its team across multiple
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offices. After acquiring Letsbuy.com a few months ago in a bid to boost its
electronics product catalogue going forward and launching the digital music store
Flyte, Flipkart has expanded into pens & stationery, home appliances, perfumes and
most recently bags, belts & luggage.
Karandeep Singh (joined the company in January 2012), Flipkart CFO, is the one
who handles all aspects of finance and corporate governance. Within weeks after he
joined last December, Flipkart reportedly raised a mega round of funding from
existing investors and also announced the acquisition of Letsbuy.
Sameer Nigam (joined in October 2011), VP (digital business), was the founder of
Mime360.com, a digital distribution platform solution which hosts music streaming
for labels like Saregama, Universal Music and Inreco, which was acquired by
Flipkart last October. This made public Flipkart‟s plans of entering the digital
distribution domain and the company did launch Flyte, one of India‟s largest legal
online music stores.
Maneesh Mittal (been with Flipkart since September 2009), VP (operations), is a
B.Tech from IIT-Delhi. Although he joined the e-commerce company as a general
manager, he went on to become AVP (warehousing) and was finally elevated to VP
last year.
Sujeet Kumar (joined in December 2008), president (operations) at Flipkart, is a
B.Tech in Civil Engineering from IIT Delhi. He has been there for quite some time
and has been responsible for building the company, along with the Bansals. Kumar
oversees supply chain, warehousing and logistics, and is also in charge of business
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development for all categories. Plus, he is the one who ensures „customers‟ delight‟
through smooth operations at every level.
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6. Customer Social Responsibility drive by FlipKart
Flipkart has not contributed in CSR but may take initiative in near future.
7. Objective of the Study
Study How FlipKart succeeds in online retail business.
8. Analyse the Study
Flipkart success has been from best customer service, organized efficient supply chain
management, innovative e-commerce technology.
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