Flipkart Story – All You Need To Know [Unofficially]

It’s been about a year since Flipkart started moving from being a pure bookstore to selling mobiles/DVDs etc. Then we had cribbed about a possible brand dilution and investor pressure. Probably we were never sure about the bigger picture. Since then, Flipkart went for a major brand makeover, making it look more ‘upmarket’. There has been large newspaper ads, TVCs and a lot of web ads. But unlike other eCommerce companies the inorganic marketing kicked in only when the product was strong.

Flipkart already had a proven model execution with books and extending to other verticals did not need infrastructural changes. Flipkart’s real achievement has been in solving the pain points in Indian eCommerce that most well funded players are still complaining  about.

Here are some of the things that Flipkart has done well in solving each of these problems.

1. Discoverability:

It is the case with any venture on the web, “How does the customer find us?” Answer: Organically!
Flipkart has been the “baap” of SEO. This has been the most important contributor to their success. I say this, because only when you see people coming to you, you get encouraged to deliver more and keep adding. There is no fun (motivation) in adding features to a product that no one is using.

Though from what I had noticed, SEO did not come the straight way. There were particularly 2 things that are worth mentioning.

a. Yahoo News: Until last year Flipkart had a feed of Yahoo News on its product pages. From what I understand of SEO, this is to increase the keyword density and introduce ‘original’ content on the page, as the product description across all books sites is same. This was removed later as it was violating the Yahoo’s ToS on using the service for a commercial site. Check the Waybackmachine here. I loved the risk they took for this.

b. We Do Not Sell Used Books: This one is my favorite. If you check the Waybackmachine in the last line you will notice the following text.

  • We DO NOT sell old books or used books. All the books listed at Flipkart.com are new books.
  • The books listed at Flipkart.com are NOT available for free download in ebook or PDF format.

The magic of this text is that if you search for “<book name> free ebook or “<book name> pdf download” you would always get Flipkart among the top results. These are very popular search queries and Flipkart had nothing to do with it but still they cashed in. This was also the time when Flipkart had Adsense embedded. People would come to the site, see nothing like a “PDF download” button, and then see an ad for PDF download and click. This meant more revenue for Flipkart. I have done this atleast twice myself. Given that the margin on books are very small after the discount, Flipkart was probably earning more by saying what they did not do than by doing what they actually were suppose to do.

2. Payments:

No credit card/netbanking, fear to transact online, repeat transaction failures, no access to web – these are the common problems with online payments. What Flipkart is doing to overcome these?

From what I last counted, Flipkart had atleast 4 different Payment Gateways integrated. They introduced Cash-on-Delivery. Then they are also doing order on phone. Payment via DD/Cheque is also accepted.

2 basic things that they are currently doing that takes little tech. effort but quite some product management ‘will’:

a. Auto redirection to banking site: Unlike most other ecommerce sites, Flipkart never lands you on CCavenue page, you are auto redirected to the banks page where the info is required to be filled. Flipkart by-passes 1 unnecessary page by passing the required parameters directly to CCavenue and not through a user interface.

b. Banks Status: Flipkart maintains its own real time status if the bank’s netbanking is working or not. So there are no surprises after you have chosen the bank and then go to the netbanking page.

And if you think Flipkart gets very good rates from Payment Gateways, not really. Atleast 1 big PG that I am aware of charges quite high rates to Flipkart, atleast 40-50% more than to lesser known players.

3. Inventory:

I come from a traditional business family where we believe in selling what we have. The world of eCommerce really amazes me when I see the players keeping a standard list of products and then go out procuring it only when there is an order placed. Imagine if you go to a brick & mortar shop and after billing the manager sends a boy to a nearby store to get the goods. This is where the problem starts. There is no inventory on their end and there is no live status of inventory from their supplier. Remember The Alchemist, “Never Promise something that you don’t have“.

After placing an order, they would keep looking for the product at multiple places. After a week you might get a call saying that either the product is not available and we will do a ‘favor’ by refunding your money or if the product is there, it is not the color/size that you asked for.

Flipkart was no different in 2009, a couple my friends used to get similar calls after days of ordering. But for the last 1 year atleast Flipkart maintains its own inventory(or atleast it seems so). They are selling what they have. From pure hearsay, Flipkart is taking up a big warehouse in Bangalore and is in talks for one in NCR as well. One of the few companies that is using the funding to build a business and not spend it like a FMCG company on ads.

4. Delivery:

I have dealt with courier companies in my last startup and am quite aware of the ‘fcukall’ standards they have. Most similar looking envelopes are never delivered thinking that it is a marketing package and no one would track it. They would be willing to bargain on rates but would never say anything about the service. Paying a premium may not solve the problem always.
Flipkart is exploiting this problem as a cashable need gap and building its own delivery backendFlipkart is seen delivering through their own delivery boys in Bangalore and at times within 12hrs from order.

Flipkart has started putting fliers in newspapers in Bangalore with a product listing, call-to-order phone number and a promise of delivering ‘tomorrow’. This means more discoverability, no payment problem and no delivery delay. The way it is actually suppose to be.

From what I heard from multiple sources, Flipkart is looking to build its own courier company. The recent $20Mn funding from Tiger Global was only part of a larger sum they are known to be raising. Flipkart is looking to raise $100Mn at a valuation of $200Mn.

Recently, Flipkart has started selling everything from cameras, laptops to gaming consoles to personal and health care electronic products. There are major talks about Amazon acquiring Flipkart but it would only make sense to grow it bigger and better from here. A handover wouldn’t see the same product management ‘will’.

Flipkart is a story that is come from smart work and an ‘it is possible’ attitude. There is a need to for a couple of more stories like these and there would be no cribbing about Indian eCommerce not working.

What do you think of Flipkart story? Do share any interesting features that you noticed at Flipkart.

[Naman is a startup enthusiast and has worked with couple of Indian startups as Product Manager. He writes at The Inspire Blog]