Flipkart Case Study
Did you know that in the early 2000s, which means from 2000 to 2010-2012, people were not trusting on online e-commerce sites, and were not ready to purchase anything from online sites by paying money by debit or credit card upfront?
At that time, it was too risky and dangerous to start a brand new e-commerce company by investing your own money and leaving the current high-paid job for anyone.
But two Indian guys took this huge risk in 2007, left their high-paid jobs, and surrendered themselves to a start-up to evolve a new concept on the earth.
Eventually, they got a massive success after facing many ups and downs during their new business concept journey.
How they started the new concept of cash on delivery to win the trust of the audience, how they thought to start their own e-commerce company, and how the biggest retail company in the world Walmart acquired it. All events are going to explore this in this Flipkart Case Study Article.
Flipkart is the first Indian e-commerce company established in 2007 in Banglore by Sachin Bansal and Binny Bansal, and it was selling only books at the beginning.
Today Flipkart has covered more than 80 categories of products including clothing, home appliances, electronic items, groceries, and several categories.
More than 1 Billion people have made multiple purchases from Flipkart till now, and there are many subsidiaries of Flipkart such as Myntra, PhonePe, ePay, eCart, etc…
Talking about the users, Flipkart has more than 10 Crores users who are constantly active on Flipkart to make an online purchase.
Flipkart is holding warehouses in more than 21 states of India having more than 10 lakh sellers associated with it.
Almost 1 crore people per day are interacting with Flipkart via their website and application with different devices like mobile, laptop, and tablet.
Walmart, which is the biggest retail company in the world, bought 77% shares of Flipkart in 2018, and why this happened, we will explore this later on in this article.
Owners of Flipkart – Flipkart History
Flipkart was founded by two brothers Sachin Bansal and Binny Bansal, and they are the owners of Flipkart.
They founded Flipkart in 2007 in Bangalore in their room and began selling the books online by an e-commerce site named Flipkart.
Both brothers have the same interest in the IT sector, and they joined amazon to make their career, and they were doing a job in Amazon.
While doing a job in amazon, they learned many things, recognized the future of the ecommerce industry in India, and finally made their mind to launch their own purely Indian ecommerce site.
After making a decision to start an ecommerce company, they left the job from amazon and started to establish Flipkart from their bedroom of 2BHK house in Bangalore.
A very few people know that Flipkart owners did not ask anyone for the funding, they started Flipkart with their own saving of 4 lakh rupees as an investment.
In 2014, Flipkart jumped into the electronic market, and during this period, with a lot of struggles, it entered into the Unicorn Company, i.e. it became the company of US $1 Billion.
Flipkart Business Model
The business model of Flipkart has always been based on solving the problem of people.
From 2007 to today, Flipkart has been growing constantly, due to its consistency with many hurdles.
At the time of the establishment of Flipkart, there was not such an environment of online buying in India.
But instead of looking for another business idea or another business model, they found out why the Indian population doesn’t adopt the online buying method.
They found the root cause of it is a trust issue, people were not willing to pay the amount for the product upfront.
Flipkart innovated the idea of cash on the delivery strategy which was the turning point of the ecommerce business in India.
Flipkart works on the B2C – Business to Consumer Business Model where it becomes the bridge between the sellers and consumers.
Flipkart is performing the task of delivering the products to the customers by picking from the sellers.
It charges from 5% to 20% of the product price from the seller to provide the delivery service to the consumer’s doorstep.
The Flipkart business model is working on the reverse strategy, that they do not have to go to the customer.
But they should provide such values that customers come to Flipkart in search of their advantage.
Revenue Model of Flipkart
The major revenue model of Flipkart is based on the sellers, as I mentioned just now that Flipkart charges the merchants from 5% to 20% of the product price.
The second revenue model of Flipkart is to take the benefit of the high competition between the sellers.
Sellers display the advertisement on the Flipkart portal to list their products on the top of the portal, and for that, they have to run ads by paying to Flipkart.
The third revenue model of Flipkart is to earn the profit from logistics as well, thus the Flipkart revenue model is distributed in several streams.
According to Statista, The annual turnover of Flipkart is around 346 Billion Indian rupees which have picked the highest edge of Rupees 436.15 Billion in 2019.
Flipkart Products Model
Talking about the products of Flipkart, it has more than 80 categories of products listed with more than 8 crores of products.
The beginning was quite interesting, Flipkart was selling only books, and by going in-depth into the market, they found many problems that people were facing.
Clothing, electronics like smartphones, computers, laptops, and many other products were started to get listed on Flipkart one by one day by day.
Customer Targeting of Flipkart
Flipkart works with the undifferentiated demographic strategy, which means they try to cover each type of audience by making almost every kind of product on their site.
It is a one-store solution, i.e. you can find any product that you want, either it is a wallet, or it is speakers or grocery, or it is a towel, or anything, almost everything you will find on Flipkart.
The strongest and biggest competitor of Flipkart is Amazon, and Amazon is providing almost all kinds of products that people want.
So, Flipkart needed to do the same to survive in the ecommerce market, and that is why Flipkart adopted the undifferentiated demographic strategy for its business model.
Flipkart did two major things, one is that they built trust in the audience, and second that they became customer friendly.
As a result of these both strategies, customers started to pay an upfront payment in place of cash on delivery.
Flipkart Taglines – The Best Marketing Strategy of Flipkart
Flipkart is known for its dynamic taglines because it keeps changing the taglines frequently.
Taglines are used to target the people personally, taglines identify the problems of customers with the solution provided by the company, and that’s why every big brand must use the taglines.
Firstly the tagline of Flipkart was ” ab har wish hogi puri”, then after “abhi nahi to kabhi nahi”, then after “if it’s trending, it’s on Flipkart”, then “Be trendy always”, again “itne me itna milega”, and then “shopping ka naya address”.
So, the logic of changing the taglines of Flipkart is to keep the audience engaged with different offers and approaches.
When inflation was booming in India, Flipkart created a new tagline ” ab mehngai giregi”.
There was a very deep logic behind keeping this tagline. Flipkart was not going to control the inflation, but it was registering one belief in people’s minds that people will not be a part of inflation if they purchase anything from Flipkart.
This was the best marketing strategy of Flipkart in that it was changing the taglines according to the situation of India.
Another best marketing strategy of Flipkart is to announce the Big Billion Sales every year, and it brings a huge class of consumers for Flipkart each year after launching this campaign.
Funding of Flipkart
Flipkart was the self-funded business model in the beginning, and it was started with only just 4 lakh rupees as ecommerce sites to sell the books only.
After the unstoppable success of Flipkart, many resources of funding took interest in Flipkart, and till now Flipkart has gained funding of $9 Billion in 24 rounds.
The first funding was raised by venture capital firms Accel India in 2009 with the amount of $1 Million for Flipkart.
Acquisition of Flipkart
Considering the acquisition, Flipkart has not left this field as a blank as well.
Flipkart bought Myntra for $300 Million in 2014 which is one of the biggest fashion trending brands.
Then Flipkart did take a pause in the acquisition and bought Jabong for $70 Million, and then PhonPe and eBay in 2017.
Major Competitors of Flipkart
A successful business model has many rivals, and there must be because competitors perform a very major role in the growth of your business.
Considering the biggest rivals of Flipkart, Amazon, and Snapdeal are the strongest competitors of Flipkart.
The 39.5% of Indian eCommerce consumers make purchases from Flipkart, and with the consistency of these stats, last year was also of the Flipkart with the highest e-commerce consumers.
Conclusion of Flipkart Case Study
Flipkart is an ecommerce company that was started with only bookselling without any external funding by two real brothers.
The strange thing about Flipkart is that it is the strongest competition of that ecommerce company in which the founders of Flipkart were doing a job for a few years.
Analyzing the Flipkart case study, it beats Amazon in some aspects, and of course, being a purely Indian E-commerce Company, it has the biggest advantage of the emotions of the Indian population as well.
Flipkart may launch the IPO also in the near future by listing it in the stock market. Well, there is no official announcement, but there are several possibilities to do so.
The customer problem-solving-oriented approach made the Business Model of Flipkart too successful.