Flipkart - Big billion day case study PDF

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SONA SCHOOL OF MANAGEMENT A unit of Sona College of Technology, Salem. Has Flipkart flipped its cart? Flipkart, an ecommerce company started by Sachin Bansal and Binny Bansal in the year 2007 to cater Indian consumers needs. Founders were alumni of IIT Delhi and worked for Amazon.com before starting...

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SONA SCHOOL OF MANAGEMENT A unit of Sona College of Technology, Salem. Has Flipkart flipped its cart?

Flipkart, an ecommerce company started by Sachin Bansal and Binny Bansal in the year 2007 to cater Indian consumers needs. Founders were alumni of IIT Delhi and worked for Amazon.com before starting Flipkart. They have invested Rs.4 lakh to start the website; out of that they spent Rs. 2 lakh to buy computers and furniture. Even though the company is headquartered in Bangalore, India it is legally registered in Singapore. It started to sell books online initially and now it is selling 15 million products 70+ categories on par with Amazon.in. Flipkart invites sellers to network with them to sell products to the end consumers, here it just acts as market place for consumers and sellers. People have perceived risk associated with online purchase, Flipkart marketing strategies reduced people s per ei ed risk a d ade illio s of people to buy products. Unique strategies adopted by them to capture Indian consumers are cash on delivery, 30 days replacement policy and easy monthly instalment. The website now has 2.2 crore registered users, 40 lakh daily page visits and 50 lakh shipment every month. When Sachin Bansal shared his story to Yourstory.com, he mentioned about the marketing strategies employed during the initial days of Flipkart. We used to stand outside Gangaram Book Stores on Church Street and hand over Flipkart bookmarks to the people coming out of the shop. In order to make sure that our targeting was right, we would give bookmarks to only those who were coming out with books in hands; the people who have made purchases . – Sachin Bansal. Flipkart first sale happened when VVK Cha dra fro A dhra Pradesh ought a ook titled Lea i g Mi rosoft to Cha ge the World . Word of outh arketi g as the pri ary support for the e-tailer during the initial days and even now it supports the organization as pillar. Major marketing plans made by Flipkart include Flipkart students, Flipkart First Service and Flipkart mobile app in the recent days. Students who register with their ID card get Rs.150 off on purchases made over Rs.750 and they get 50% off on Flipkart First service. After getting their supply chain network strengthened by establishing Ekartlogistics founders made a move by introducing Flipkart first service to support regular buyers. If the customer pay Rs.500 per annum they get free shipping for the order without any minimal purchase price, discounted same day delivery (just Rs.70), free in a day delivery, and access and priority to all the shopping events. Flipkart first service is similar to Amazon prime premium subscription service. Marketing strategies employed ensured customer visiting the website regularly and make a purchase. By acquisition of many other online sites like WeRead, Mime360, Chakpak.com, Letsbuy.com, and Myntra.com takes the company to greater heights in the ecommerce industry in India. The website is able to sell 20 produ ts per i ute a d it s ai i g to tou h IN‘ illio re e ue y . Flipkart website gets huge traffic every day, according to Alexa.com reports Flipkart.com is at 91 st rank globally and 6th rank in India. Looking at the demographic factors, males are mostly visiting the sites rather than females. People access the sites from schools, home and work place out of which work places tops in the list. Flipkart was loved by people for its simplicity of the websites, easy -------------------------------------------------------------------------------------------------------------------------------Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is meant only for educational purpose.

payment process, excellent delivery, discounts, offers and promotion. As market leaders in India Flipkart enjoyed its journey in the last seven years with 10000 employees. Day that made a difference On October 6th, 2014 Flipkart went for a biggest deal in the Indian history it proudly called it as Big illio day . On the big billion day, Flipkart told it will sell multiple items at Rs.1, 30% off on smart phones, laptops at Rs.15000 starting price, fashion and perfumes at 50% off, toys at 50% off, deals and lucky draws every hour. Flipkart sold Nokia Lumia 525 at 90% discount, Kodak cameras at just Rs.1195, Galaxy tab 2 was just sold at Rs.1390 and Karbonn Mobile A5i was sold at Rs.99. Sachin and Binny were working round the clock and 9000 plus employees were working for 12 hours and more to achieve targets.

Dates for the sale was not fixed randomly, it was fixed based on the history of Flipkart. October 6 – 10th was chosen because Sachin and Binny started flipkart from a apartment numbered 610 seven years back. The big billion day was promoted through social medias, emails, and tv ads which grabbed attention of millions of people across India. When the sale was opened on 6th October 2014 by 8 am, many things happened. On that day the site got one billion hits and was able to achieve its target of USD 100 million in just 10 hours. Sachin and Binny Bansal were able to achieve what they aimed for. Despite the success, there were odd things happened on that day. Missionsharingknowledge.com pu lished a post titled Flipkart s The Big Billio Day – a pricing SCAM? hi h sho ed ja ked up prices for many products just few days before the Bigbillion day. [See Exhibit No 1] Customers were eager to get the offer but they were not able to grab one as they expected. Since the expectation of customers was boosted beyond the limit by promotions it backfired on Flipkart. Flipkart ade e ough arra ge e t to support u er of isitors by deploying 5000 servers but the servers crashed and people were not able to order products [See Exhibit 2]. People started to o k Flipkart i t itter a d fa e ook. Flipkart s ra d a e got tar ished o that day si e the word of mouth was negative. [See Exhibit 3 and 3.1]

-------------------------------------------------------------------------------------------------------------------------------Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is meant only for educational purpose.

People also claimed that most of the products went out of stock in few minutes; also products were cancelled by Flipkart itself [See Exhibit 4]. Even customers were annoyed by highly inflated prices and miscalculated price discounts [See Exhibit 4 and 4.1]. Adding to the worries newspapers and loggers rote a out Flipkart s perfor a e o O to er th. Indian express plainly told - Big Billio Day sale gets Flipkart millions of unhappy customers. Flipkart did t fa e pro le s only with customers; they also faced problems from the competitors. Snapdeal.com added worries to Flipkart by putting an advertisement mocking the bigbillionday. The ad ertise e t said For others, it s a ig day. For us, Today is o differe t – Best deal guaranteed. Every day. This advertisement appeared in the front page of Times of India and at the back page Flipkart advertisement was published [Exhibit 5]. Amazon made a tricky move they bought bigbillionday.com domain, if a customer gets into that domain it will automatically redirects the customers to amazon.in. Customers even compared the offer prices with other e-tailers and found they are offering products cheaper than the offer prices of Flipkart. These information went viral in twitter and face book. Twitter got lot of tweet with #bigbillionday #checksnapdealtoday. People started to hide flipkart i the so ial edia a d they said it s ot Flipkart it s a tually fakekart, flopkart, foolskart and so on. Even customers were told that they will not get products delivered in Chennai and Madurai. Tamil Nadu usto ers ere ot i luded i the lu ky dra . Custo ers fro Ta il Nadu said We do e e uy . Flipkart re erted a k sayi g the Ta il Nadu go er e t do t a ept lu ky dra s as per their regulations. Many customers reported the offer was continuously changing even during the purchase [See Exhibit 5.1]. Bigbillionday promotion helped Flipkart to achieve its monetary target yet it lost its sheen in terms of brand loyalty. Very next day, Sachin and Binny Bansal wrote apology letter to customers and employees. The letter to customers talked about the price issues, technical glitches, out of stock issue and website issue. To the employees stating they take the entire responsibility for what has happened on the bigbillionday [See Exhibit No 6]. Apology message from Flipkart aggravated the anger of people, in just 39 minutes after their apology message in Face book page got 266 comments and most of them were against Flipkart. In spite of all odds Flipkart was able to achieve its target and many people even wrote good review for Flipkart bigbillionday purchase.

-------------------------------------------------------------------------------------------------------------------------------Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is meant only for educational purpose.

Is it a scam? Exhibit No 1.

Source: http://missionsharingknowledge.com/flipkarts-the-big-billion-day-a-pricing-scam/ Author: Hrish Thota -------------------------------------------------------------------------------------------------------------------------------Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is meant only for educational purpose.

Server Failure Exhibit 2:

Twitter Comments Exhibit 3:

-------------------------------------------------------------------------------------------------------------------------------Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is meant only for educational purpose.

COMMENTS RECEIVED FOR FLIPKART BIGBILLIONDAY IN FACEBOOK Exhibit 3.1: Rohith Garnepudi Flipkart Flipkart Yes papa Selling cheaper Yes papa Telling lies No papa Where are the offers Hahaha... Girish Shenoy Dear SAchin and Binny of flipkart.com. believe me.. I have decided not to shop in flipkart anymore.. I was an occasional shopper on flipkart.com but since this foolish incident.. I have decided not to even open your site anymore.

Big Billion Day: Exhibit 4:

Order cancelled by Flipkart not by the customer.

-------------------------------------------------------------------------------------------------------------------------------Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is meant only for educational purpose.

Take a look at the device's original price. The price mentioned is Rs 49,999 (£507), and the device is claimed to be offered for a price of Rs 2,299 (£23) which represents a near 95% discount which seems really unrealistic. Source: http://www.ibtimes.co.uk/analysing-deal-behind-flipkarts-big-billion-day-sale-1468884

Source: http://www.ibtimes.co.uk/analysing-deal-behind-flipkarts-big-billion-day-sale-1468884 Exhibit 4.1

-------------------------------------------------------------------------------------------------------------------------------Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is meant only for educational purpose.

Source: http://tech.firstpost.com/news-analysis/flopkart-twitter-mocks-flipkarts-big-billion-dayfestive-sale-236751.html

Advertisement that created demand: Exhibit 5.

-------------------------------------------------------------------------------------------------------------------------------Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is meant only for educational purpose.

Exhibit 5.1:

Apology after Misery Exhibit 6: Originally posted in economicstimes.com

-------------------------------------------------------------------------------------------------------------------------------Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is meant only for educational purpose.

Reference sites:1]http://www.business-standard.com/article/companies/amazon-builds-india-business-quietly114040300984_1.html 2]http://www.businessinsider.in/Flipkarts-MegaSale-Faces-Backlash-Snapdeal-GainsEdge/articleshow/44499866.cms 3]http://gadgets.ndtv.com/internet/news/flipkart-students-scheme-launched-with-exclusivebenefits-for-students-555530 4]https://novoed.com/venture1-2014-2/reports/256434 5]http://economictimes.indiatimes.com/industry/services/retail/flipkart-accepts-shoddyperformance-apologises-for-glitches/articleshow/44630127.cms 6] http://www.ibtimes.co.uk/analysing-deal-behind-flipkarts-big-billion-day-sale-1468884 7] http://post.jagran.com/flipkart-apologises-for-glitches-during-big-billion-day-sale-1412696691 8) Facebook page of Flipkart.com

-------------------------------------------------------------------------------------------------------------------------------Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is meant only for educational purpose....