Flipkart, e-retail in India, VC funding of e-retail, Snapdeal, Myntra, Amazon, Reliance Digital, India e-Retail
2007. An online book-store in India boots up and goes on to claim "80%" of the market-share, of lo and behold - the online-books market. In that year, what was it?
What is it now, almost 7 years later? Less than 10% of nearly 45 million of the active net users have ever shopped online. Out of those 10%, let's say half (which is a huge positive assumption in favor of flK) have
ever purchased also at flK (assuming the brand equity is so strong).
In absolute terms, 5% of 45 million is 2.25 million.
2.25 million out of 1200 million is 0.1875 PERCENT.
So, in nearly 7 years, FLIPKART has successfully gone on to become (let's assume that as well in their favor) the favorite shopping web-site of 0.1875% of Indians, having been UNABLE to tap the balance 99.8125% of the Indian population.
It's 2013. Let's flip the kart. We need to, else how does one explain the growth over 7 year in a literally virgin territory. Yes, when there was no OTHER player.
To me, that sounds fishy - as it can, in the marketing sense of the world.
Does Flipkart know a thing or two about marketing themselves?
That has me worried - it's not my money, but still, ugly schemes create a disadvantage for even the most deserving funds-wannabe's.
PayZippy is an indigenous solution that FlipKart hopes over 2,000 retailers will sign up with, in another year or so.
FlipKart has restrained deliveries in UP beyond Rs.10k. UP still is ~200mil state ranking first on pop, almost a sixth of India! What if that was to happen in more territories?
All this while Amazon has started testing drones so that it may be able to deliver upto 86% of its usually 2.3 kgs or less packages directly to its users.
2007. An online book-store in India boots up and goes on to claim "80%" of the market-share, of lo and behold - the online-books market. In that year, what was it?
What is it now, almost 7 years later? Less than 10% of nearly 45 million of the active net users have ever shopped online. Out of those 10%, let's say half (which is a huge positive assumption in favor of flK) have
ever purchased also at flK (assuming the brand equity is so strong).
In absolute terms, 5% of 45 million is 2.25 million.
2.25 million out of 1200 million is 0.1875 PERCENT.
So, in nearly 7 years, FLIPKART has successfully gone on to become (let's assume that as well in their favor) the favorite shopping web-site of 0.1875% of Indians, having been UNABLE to tap the balance 99.8125% of the Indian population.
It's 2013. Let's flip the kart. We need to, else how does one explain the growth over 7 year in a literally virgin territory. Yes, when there was no OTHER player.
To me, that sounds fishy - as it can, in the marketing sense of the world.
Does Flipkart know a thing or two about marketing themselves?
That has me worried - it's not my money, but still, ugly schemes create a disadvantage for even the most deserving funds-wannabe's.
PayZippy is an indigenous solution that FlipKart hopes over 2,000 retailers will sign up with, in another year or so.
FlipKart has restrained deliveries in UP beyond Rs.10k. UP still is ~200mil state ranking first on pop, almost a sixth of India! What if that was to happen in more territories?
All this while Amazon has started testing drones so that it may be able to deliver upto 86% of its usually 2.3 kgs or less packages directly to its users.
Here's a quick 101 on FlipKart:
- started with 2 members, now 4,500 member company
- started by two ex-Amazon IITians
- started as a portal that would compare a number of shopping web-sites, only problem was there weren't enough web-sites to compare
- went on to become a book-store, with inventory-to-cash model
- claims to have acquired 80% of market-share in online bookstore category (read above!)
- today ships about 30,000 items a day or about 20 items a minute (approx. Rs. 2.5 crore or $0.5 mil a day), seen recent QoQ growth of 100%
- Nearly 60 percent of Flipkart's orders are cash or card on delivery
- Though all book-stores get discounts of upto 60% from publishers, FlipKart claims that low over-heads enable it to pass on massive discounts and therefore deeper prices to its users
- Claims to be providing excellent customer service, although it still is not good enough
pp
- FlipKart's reader is a typical young buyer, most serious book readers still like to go to a store (to check out a couple of books thoroughly before making the decision)
- Amazon with much deeper pockets can be a considerable threat, because it can pre-empt FlipKart's loss-leadership
- Though all book-stores get discounts of upto 60% from publishers, FlipKart claims that low over-heads enable it to pass on massive discounts and therefore deeper prices to its users
- Claims to be providing excellent customer service, although it still is not good enough
pp
- FlipKart's reader is a typical young buyer, most serious book readers still like to go to a store (to check out a couple of books thoroughly before making the decision)
- Amazon with much deeper pockets can be a considerable threat, because it can pre-empt FlipKart's loss-leadership
- Competitors of FlipKart: Letsbuy, Snapdeal, Myntra, Quickr, Amazon, eBay, Dhamaal, Barnes n Noble, Walmart, Reliance Digital, Croma and many others are beginning to define the competitive landscape
- Launched own brand 'Digiflip'. Digiflip is a brand of digital accessories with products like laptop bags, laptop sleeves and camera bags among others
- Entered digital electronics space around September 2010
- Digital content shop called 'Flyte'
- By early 2013 had its own distribution network in about 37 cities
- As per iamwire of April 22 2013, Flipkart may have decided to scale down its books operations from 200 to about 150 vendors and also may have released (read "Fired) a number of human resources - upto 1000
- Premji Invest, the venture arm of Azimji Premji, is investing $50 million in Myntra - whose expected 2013 turnover is Rs. 800 crore
- Has more than a million unique visitors a month
- Shelved IPO after raising plenty of money around August 2013, changed business model from inventory based to service based (providing a meeting point between sellers and buyers and charging a fee for that)
- Around Oct.11, 2013 FK shares reached high of Rs. 909 and market cap. of about Rs. 9300 crores (1.5 b$ -more than the market capitalization of 10 retailers combined
- Launched iPhone app with offline catalogue capabilities, purchase history and preview
- Opened its code for independent developers: Phantom and HostDB
- Planning to come out with Ezetap, a COD card-swipe payment solution
- Raised money( 200 mil$ from investors who had put in 180 mil before and then 160 mil from new investors) is expected to be utilized to:
+ scale technology for 10 times delivery capabilities
+ develop warehouse partners and increase the number of warehouses from six at present
+ spread warehouses and distribution to more tier II and tier III cities
+ develop complete tracking software, including at customer end
+ develop mobile commerce solution including ability to take payments on phone
+ develop backend software to manage data flow
+ invest in training its people
In my further analysis - FlipKart also needs much better marketing and much better supply-chain integration across deeper categories.
- Launched own brand 'Digiflip'. Digiflip is a brand of digital accessories with products like laptop bags, laptop sleeves and camera bags among others
- Entered digital electronics space around September 2010
- Digital content shop called 'Flyte'
- By early 2013 had its own distribution network in about 37 cities
- As per iamwire of April 22 2013, Flipkart may have decided to scale down its books operations from 200 to about 150 vendors and also may have released (read "Fired) a number of human resources - upto 1000
- Premji Invest, the venture arm of Azimji Premji, is investing $50 million in Myntra - whose expected 2013 turnover is Rs. 800 crore
- Has more than a million unique visitors a month
- Shelved IPO after raising plenty of money around August 2013, changed business model from inventory based to service based (providing a meeting point between sellers and buyers and charging a fee for that)
- Around Oct.11, 2013 FK shares reached high of Rs. 909 and market cap. of about Rs. 9300 crores (1.5 b$ -more than the market capitalization of 10 retailers combined
- Launched iPhone app with offline catalogue capabilities, purchase history and preview
- Opened its code for independent developers: Phantom and HostDB
- Planning to come out with Ezetap, a COD card-swipe payment solution
- Raised money( 200 mil$ from investors who had put in 180 mil before and then 160 mil from new investors) is expected to be utilized to:
+ scale technology for 10 times delivery capabilities
+ develop warehouse partners and increase the number of warehouses from six at present
+ spread warehouses and distribution to more tier II and tier III cities
+ develop complete tracking software, including at customer end
+ develop mobile commerce solution including ability to take payments on phone
+ develop backend software to manage data flow
+ invest in training its people
In my further analysis - FlipKart also needs much better marketing and much better supply-chain integration across deeper categories.
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