What Flipkart Can Do To Flip Amazon's Growing Kart?

What Flipkart Can Do To Flip Amazon's Growing Kart?
Image credit: Entrepreneur India

Increasing internet (and importantly smartphone) penetration and growing trust in online payments are two primary growth drivers for huge eCommerce growth in India since 2010.

According to ASSOCHAM report, India’s eCommerce grew from $23B in 2015 to $38B in 2016, a massive 67 per cent growth. With number of online shoppers increasing from 40M in 2015 to ~100M by 2020, the overall online retail market would grow to $100B.

So the market can easily accommodate couple of Amazons, Flipkarts, Snapdeals and Paytms. Considering Flipkart (and other Indian eCommerce startups as well) losing its market share and struggling with growth in recent times, I would prefer to see Flipkart build its arsenal on its home turf and compete with Amazon to maintain sector balance and to benefit end customers like me.

Flipkart vs Amazon

Flipkart was still in its growth phase when Amazon(after stumbling in China) launched its India operations in 2013. In 2014, Amazon created ripples in eCommerce sector by announcing that it had set aside $2B as war chest (with more billions at its disposal) to invest and grow its India business.

That was a significant investment as Flipkart has raised just ~ $3B since its launch in 2007, and it hasn’t made any profits to potentially invest further and compete against eCommerce giant. Now in 2016, there are reports that Amazon has dislodged Snapdeal to become the second largest online marketplace, trailing behind Flipkart which had early-mover advantage.

Flipkart has already lost around 30 per cent of its valuation in 2016, which means that it would struggle with raising capital from its current and new investors at desired valuation. But Flipkart has potential to retain its market position against Amazon and regain investors’ support if it focusses on these three aspects.

a) Build a TRUE Customer-First Culture: There are striking differences between the customer service standards of Flipkart and Amazon. There are thousands of web instances shared by Flipkart customers on bad service, and thesemight force millions to question faith on the business. Honestly if you are managing complex logistics processes for online marketplace, such instances (missed deliveries, wrong items, and unfulfilled orders) would certainly happen.

But what really matters is how transparent and effective you are in providing the updates to the customer. If an order was placed for an important event (let’s say anniversary), such regular and clear updates wouldn’t keep the customers waiting for the last moment and then feel very disappointed if suggested delivery period is missed. Jeff Bezos considers VERY high standards of customer service as the differentiating factor to build trust in eCommerce business.

b) Focus on Millennials and Invest in social shopping capabilities: This idea stems from millennials’ desire for personalization and social engagement in their buying experience. Customers from different walks of life in general, are more sensitive to recommendations and feedback provided by their close friends. By tying product reviews back to friends and family, social shopping platform would instill trust and add credibility and pertinence to reviews.

This would directly influence millennials (and indirectly their older family members) to spend more on Flipkart’s platform. Millennials’ purchasing decisions and trust in brand are also greatly determined by social influencers (which are not essentially Bollywood celebrities and cricketers), in addition to feedback provided by their close circle of friends.

These social influencers can be bloggers, vloggers, stylists, and writers. Letting the young customers connect their Flipkart account with their social media profiles and track the feedbacks/reviews by their friends and influencers would help to build a holistic and seamless social shopping experience. Flipkart launched “Flipkart Ping”, an invite-only feature, in August 2015 but I personally feel it is miles away from the true experience what millennials like me NEED. 

c) Making Bansals more prominent in marketing programs: Flipkart is essentially not an Indian firm (as it is registered in Singapore) so “swadeshi” campaign would certainly not work for it, but Flipkart’s founders belong to that super-successful Indian class with whom most of the Indians can relate to. Bansals are the true inspiration for Indians, similar to what Bezos and Zuckerberg are for Americans.

Bezos’ and Zuckerberg’s personalities, inspirational stories, political stands, focus on innovation, philanthropic activities and their media presence have also bolstered customers’ faith in their firms. When customers respect brand ambassadors associated with a business, they tend to overlook minor glitches. And there can be no better brand ambassador than the founder himself.

Flipkart needs to focus on incorporating its successful founders in its marketing campaigns and also make investments in other innovative Indian startups and social entrepreneurs to boost its image amongst customers. How the marketplace helped small businesses and those success stories should be shared with the world. #GrowWithFlipkart (with just seven videos since Jan 2015) was a good starting point but it seems management has since dumped that idea. The published stories were anyway ineffective.

These three aspects would certainly allow Flipkart to retain its market position but it also has to deliver innovative solutions for last-mile delivery (Note: Flipkart copied locker and grocery stores as pickup points model from Amazon), improve product discoverability, and invest in machine learning to enhance forecasting & supply chain solutions.

To conclude this article, I would love to see both Flipkart and Amazon flourish in future, compete with each other and spoil customers like me with a great buying experience.