Group Members Ateet Chaturvedi – 10 Ashvini Khandekar – 24 Nayana Premchand - 43

Flipkart - Background Launched in 2007 as an Online Book Store Initial Investment : $10 Thousand Founder Memebers : Sachin Bansal & Binny Bansal (ex-employees of amazon.com) 2010: Expanded into Media, Consumer electronics, apparel and Beauty Care 2013 : Catering to 12 Product Categories Largest e-retailer in India with current market valuation $1.5 Billion

Till 2010 Flipkart was vertical player Flipkart back end operations were conducted in Singapore under Flipkart Holdings Singapore Front end company was known as Flipkart Logistic Services For growing it backend operations company required continuous funding Flipkart - Background

6 rounds of funding

The Journey

The Product Categories

Flipkart’s aim was to first become the market leader with a dominant market share across different categories – Invested heavily in Technology & Supply Chain Opted for speedy routs of acquisitions – weRead (ebooks) – Mallers Inc : digital music content – Chakpak.com : Bollywood news & updates – Letsbuy.com : Consumer Durables Flipkart – Business Philosophy & Strategy

Focusing in Revenue and Customer Acquisition & retention – Own Inventory & Warehouse – Provided Value Added Service But this Customer Centric Strategy paid back average – Got 70% loyal and repeated customers – Did not resulted into profit Flipkart – Business Philosophy & Strategy

Low Entry barriers Underdeveloped Market for E-Commerce – Minuscule market of $500 Billion Indian Retail Sector – Low penetration rate of Internet Usage No Competitive Advantage – Price, User friendliness of Website, Product Options, variety and Speed of Delivery Flipkart – New Players / New Challenges

Competitors following / imitating all the strategies – COD, Free Shipping, Free Returns, Discounts – Expansion in tier 2 / 3 cities by market place model – Minimal Charges of shipping if value is below $8.15 – To increase efficiency & cost cut Flipkart laid off employees Advertising & Publicity – Jabong accepted aggressive strategy – Invested 3 times more in advertising + Digital Marketing – Operated 24 X 7 – Poaching Flipkart employees Flipkart – New Players / New Challenges

Re-evaluated its cost structure – To enhance efficiency – Stopped different types of discounts Exit from Non-profit product Categories – Cosumer durables – Digital Music Vertical Focused on profit making categories – Fashion Retailing (Myntra) Flipkart – Rationalise Product Mix

Amazon’s entry Strategy in India – Vast Selection, Low Prices & Fast Delivery – Entered in India with online product search engine Junglee.com – Started with alliances with 100 third party sellers Difficult Investment from VC – Lengthy period for breakeven – Only 11 out of 53 Ecommerce retailers could get the funds – Flipkart & Snapdeal required $200 - $500 Million to get profits Flipkart – Gearing up for Amazon

Flipkart got $200 Million funding from VC – Largest funding ever received by any ecommerce player – Put far ahead of its competitors in terms of scale & Technology & created strong position against Amazon – Rejected potential 10 acquisitions – Adopted Hybrid model = Inventory Model + Online Marketplace Flipkart – Gearing up for Amazon

Revisiting Competition Positioning – Launch of E-book apps – Expansion in E-book library from 2,50,000 to 1Million – In talks with India Post reach Tier 2 & 3 markets – Single Day Guarantee Delivery Flipkart – Gearing up for Amazon

What is Hypercompetition? The term hypercompetition is used to describe a dynamic competitive world in which no action or advantage can be sustained for long. Under such conditions everything changes because of the dynamic maneuvering and strategic interactions by hypercompetitive firms.

Driving Forces of Hypercompetition Falling Entry Barriers Hypercompetition Rising Deep Pockets Accelerating Technological And Business Model Change Fragmenting and Escalating Customer Demands

How are the battles of hyper competition fought and on which arena’s (Four Arenas) – Richard D’Aveni?

Price and quality Timing and know-how Stronghold Creation/Invasion Deep Pockets 4 Arenas

Adopted predatory pricing at the time of the launch of the new product categories – Selling good below actual cost – COD + Free Shipping + Free Returns – Delivery within 24 hours Price and quality

Backward Integration by virtue of own warehouses – Delivery within 24 hours Addition of 3 rd party seller Hybrid Model Timing and know-how

Invested heavily in Technology & Supply chain Speedy Acquisition to diversify in to various product categories – weRead (ebooks) – Mallers Inc : digital music content – Chakpak.com : Bollywood news & updates – Letsbuy.com : Consumer Durables Stronghold Creation/Invasion

Product Categories Launched

Deep Pockets

What is product rationalisation strategy? (use 7S of hyper competition by Richard D’Aveni)

7 S’s of Hypercompetition Superior Stakeholder Satisfaction Strategic Soothsaying Positioning For Speed Positioning For Surprise Shifting The Rules Of Competition Signalling Strategic Intent Simultaneous And Sequential Strategic Thrusts a vision for market disruption key capabilities to use across markets disruptive tactics in a hypercompetitive environment

Stakeholder satisfaction Revisiting Business Philosophy : India’s Largest Retailer to The most profitable online retailer in India Strategic soothsaying COD : Understanding that Indian Customers were not comfortable of online payments... Flipkart started with COD Predictive analytical technology to analyse consumer buying behaviour

Speed Hybrid model: Inventory Model + Online Market Place Repositioning of Books Category – App on iOS and Windows based phone Immediate announcement of within 24 hours delivery Surprise Diversification and not specilization Increase in categories to 20

Signal

Shifting the rules of market Value added services Distribution Model : – Inventory based – Hybrid = Inventory Model + Marketplace model Simultaneous or Sequential Thrusts Simultaneous or sequential thrusts refers to a company using several moves, such as a series of simultaneous product announcements or geographic market entries done in concert, to mislead or confuse a competitor.

Advantage Amazon Philosophy: Growth Over Profit Better Brand Image Wider Selection Lower Prices Faster Delivery Financial Muscle Power Flipkart fight back Philosophy: Customer Satisfaction over Profit Scaling up VC Biggest Obstacle – HR Issues – Not Only Local, But Global Concentrating on Mobile Shopping (From 20% to 50% Rise) Conclusion Analyst Belief = > E-retail would be hypercompetitive and many argue that only two rivals could Co-exist Profitably

Market Penetration Customer Centric Philosophy -Own inventory -Own warehouses -Value added services Use of Hybrid model Product Development Launch of Apps : ebook,mobile app for iOs and window phones. Addition of third party sellers Market development Talks with India Post Diversification Variation in Product category Current Product New Product Current Market New Market