Flipkart Really True To Their Words...Really Their Fashion Fantasy Came True.....But How wise!!

`Flipkart & Myntra continue to work as Independent Entities`

How true to their words , their CEOs, but the major credit goes to Mr.Sachin Bansal-Flipkart.

Flipkart- Fashion Fantasy Comes True 

Flipkart is running a fantastic eyeballs grabbing TVC campaign for its Fashion & Apparel category(Your Fashion Fantasy Comes True). Its astonishing to see that the same is still continued as on date. It seems that their Brand Manager is hell bent to build their brand in this category as well. And Mr.Bansal never believed him.

After adding Myntra to its Kart, it makes no point to spend on building F&A category under Flipkart Brand as well. Rather it sends confusing signal to the customers and the market and also display poor coordination between the IMC & top echelon of the Brand.

Some consultants may still go to the extent of declaring evil intentions of Flipkart, i.e. to transfer the benefits to its account and finally kill the Brand....The Famous American Strategy!!

P.S I still strongly feel that Flipkart had it all and could have made their own Brand in this wannabe category.....unnecessarily led by Accelerated Tigers into this!!

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Flipkart Adds Myntra To Its Kart...How Rational!!....& Will It Be Enough!!

Flipkart Adds Myntra To Its Kart in An Undisclosed Amount Estimated To Be Close To INR 2000Cr...

Will It Be Enough As A Measure To Counter Coming Threat From Amazon??

Are these sequence of events Rational In E-Commerce Space??

In one of the sensational deal in Indian E-Commerce Space(Estimated $3Bn), the biggest Indian Online-Retailer Flipkart (Crossed $1Bn Sales Turnover) finally succeeds in adding the biggest Fashion E-Tailer Myntra to its Kart. Apparel being the most profitable segment in Online Retail business, is a must for every E-Tailer in pursuit of its Bottom line, and Flipkart being the biggest player of this arena was struggling to setup its own Apparel Line. News is that Myntra will not cease to exist as a Brand. Its being said by both the Founder Bansals that the deal will bring synergy to both the parties involved!!

This will certainly raise some serious questions:-

1. If Winner is going to take it all..........then what these Niche players are doing!! Only waiting for their suitable buyers!! Bigger question : Is it Rational & How much!!

2.  Will it be enough for Flipkart to avoid the looming threat of Amazon for a while!!

Here, I would like to take this to an open platform for a meaningful debate...

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Differentiation : A Challenge Or An Opportunity for E-Retailers!!

Differentiation : A Challenge Or An Opportunity for E-Retailers!!

Excerpts from Indian Retail Congress: A special Thanks to Mr.Praveen Sinha - Co-Founder & Managing Director at Jabong, for his contribution...

E-Retail is in Early stage in India. It is moving ahead of the market here unlike in West. Indian market gives a huge opportunity but at the same time places lot many challenges for all E-Players. For `Brick n Mortar` Giant Walmart 17% Global business comes online, so future is surely `Click n Buy` but market like India is still raw. Companies have to invest a lot in creating market here, and in this process, there would be lot many new challenges and leanings for everyone.

Two challenges are prominent in this space:-
1- How to get traffic??
2-How to give scale & depth if at all you sustain??

So there are two strategies , an E-tailer can choose with:-
1. Collaborate with brands!!
2. Or Find your Niche!!

If you go for the 1st one, there can be several models (Inventory,Marketplace, Hybrid, etc). But whatever the model you choose, one thing should be your top priority and that is Customer Experience. That should be seamless in all the models and there should not be any dilution if you wish to make yourself a Brand.

The challenge with Collaboration, is that Every partner has its own processes , hence you have to reach a common platform to serve your customer.

Other challenge is that Online has once lost the Trust of customers so current companies are trying extra hard to win them back. Its surely a channel which gives a business idea the much required scalability. But with it also comes some worries, How many Options??, Assortment??, How to differentiate??

Multiple factors comes into play:-
1. The Model (The most important thing and the starting point for this business)
2. The Content (Explains the nuances of the products available)
3. The Product (Assortment levels: 1 L Products surely can differentiate as customer loves options..)
4. The Pricing (Its a strategy and decides your Positioning & TG)

But If you rate 3 most important Pillars Of Differentiation, they are:-
1. Assortment - 1K Or 1L
2. Customer Experience - How are you ensuring last mile fulfillment an Post Purchase behavior?? COD/Immediate Return/Exchange....Everything Matters!!
3. Positioning - Multiplay Or a Fashion Specialist!!

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"The Reality of Retail- The Experience is in the Brand"

"The Reality of Retail- The Experience is in the Brand."

Balance sheets are all lies, the real value of a company lies in the Brand. Brand is always in the customer context. Children & Brands are alike, they both need the same delicate care.

Brand needs Retail & Retail needs Brand. Both have to co-exist. Brand positioning must be in consistence with the Brand DNA, this is the key to success in long run.

Taking a stand as a Brand, not just a retailer. As the Retailing landscapes evolves, so must the business and brand in order to maintain market share and increase sales. The challenge for Business leaders is to create an environment of experience for the customer. Differentiation is critical to success and creating it in today`s world is a must. Customers are always willing to pay for truly innovative products that offer good quality, unique design & convenience.

Online Retail is new and in nascent stage, hence Brands are advised to Go slow. Firstly understanding of the drivers of this channel is must.Many a Brands are still not Online, they are hesitant bcoz of inconsistency in Experience on this channel. Whenever these Brands will foray into Online, Seamless same customer experience will be their top priority.

Ref: Excerpts from Indian Retail Congress 2014: A special thanks to 

1. Ashustosh Garg - CMD Guardian Lifecare Pvt. Ltd.

2.Venu Nair - MD Marks & Spencer

3. Manish Mandhana - MD Mandhana Industries 

4. Rajesh Jain - Director & Chief Executive Officer, Lacoste India.

5. Shailesh Chaturvedi - CEO & Director, Tommy Hilfiger

for their contribution.

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The E-Combatants:India`s E-Commerce industry has reached an inflection point

The E-Combatants

How the 800-pound gorilla of global internet retailing is making its biggest Indian rivals give a snappy comeback of their own

Experts feel that India’s e-commerce industry has reached an inflection point. Amazon’s entry has bought some urgency and competition into the market.Its arrival will likely catalyze a further consolidation in the market, which will see the emergence of three or four large Indian players and a long tail of high-margin speciality players in categories such as apparel, accessories and jewellery. With electronic retail accounting for barely 1% of overall organized retail, there is plenty of headroom for growth.

 

Eleven months ago, India’s e-commerce sector got an ominous warning of a sleeping giant’s rise. Amazon, the $74.5-billion giant, which had been quietly watching the local market grow from $2.5 billion in 2009 to $16 billion in 2013, according to industry lobby Assocham, decided to make an understated entry. Even as its largest Indian rival, Flipkart, was cruising towards a billion dollars in revenues and another, Snapdeal, was making similar intentions known, Seattle-based Amazon made a low-key foray. It launched in a couple of categories — books and movies and TV shows — with firm plans to take a large bite of a market expected to reach up to $56 billion by 2023. Amazon has been quick off the blocks. Since its launch in June 2013 (it launched Junglee India, an online comparison engine in 2012), the company has gone from two categories to 24, from zero sellers on its marketplace to around 1,000. Amazon has been on the move, not only by launching category after category, but pushing the envelope on other fronts. It was the first to launch next day and same day delivery; it innovated by piloting deliveries at HPCL and BPCL outlets and even dropping off packages at small kirana stores in select locations.
    “We believe that the growth is at an inflection point and there is tremendous opportunity,” says Amit Agarwal, vice-president and country manager, Amazon India. “India is a large opportunity from a consumer and service standpoint to create differentiation and we were ready when we launched to take advantage of that.”
    Amazon is dead serious about the Indian market. It spent nearly $3.5 million on lobbying in 2013, according to filings to the US Senate, including efforts to push through foreign direct investment in retail. In the first quarter of this calendar year it again spent around $1.5 million to press its case.
    Junglee , meanwhile, has emerged to be India’s No. 1 comparison site with over 30 million products, over 1,900 online sellers and over 80,000 local sellers.
    Even as the global giant goes to battle, its two largest rivals aren’t prepared to be sitting ducks. According to industry insiders, the battle is evolving into an Amazon vs Flipkart one, with Snapdeal as a scrappy third rival. 

    Sachin Bansal, CEO and co-founder of Flipkart, has had a firsthand view of Amazon’s global adventure, as a software engineer for the web giant for nearly two years between 2006 and 2007. It was this stint that convinced him to team up with IIT Delhi batchmate Binny Bansal, to start an online book selling venture in 2007 that began in a rudimentary 800-sq ft office and grew into a billion dollar online hypermarket, with over 100,000 shipments a day for products across some 20 categories. 

    Today, Sachin Bansal is preparing to go to battle with the company he ardently admires. “We are prepared to take on global rivals,” he says. “We are strongly customer-focused and we believe we have the best logistics, supply chain and technology in the industry.”
    This strong focus has helped Flipkart. The company, which has raised $550 million from marquee investors such as Tiger Global and Accel amongst a host of others, started off as an inventory-led e-retailer but transitioned into a full-fledged market place, lining up an assortment of 4,000 sellers in its quest for $1 billion in revenue. Having reached that landmark (a year before its expectations), Sachin Bansal believes that the next battle will be fought not on computers and broadband connections but over mobile broadband users. “In our next stage of evolution, we want to be recognized not as an e-commerce company, but as an m-commerce company,” he says. The firm is rapidly adding sellers and expects to rapidly increase this to up to 15,000 sellers in the next year.
    Flipkart’s switch from an inventory-led company to a market place was hardly trouble-free. The firm struggled with plunging customer satisfaction, quality issues and logistical headaches as it faced up to an exponentially larger business. More recently, it found itself in hot water for allegedly violating the Foreign Exchange Management Act to the tune of 1,400 crore. While this investigation by the Enforcement Directorate dates back to before April 2013, when it switched to the market place model, Flipkart says it had broken no rules even back then.
    With Amazon making its presence felt in the fast-growing Indian market, its largest domestic rivals know they need to act and act decisively. The market has been through several rounds of churn, as VCs initially chased opportunity in the market, only to see many of their investments crash and burn. According to estimates from NextBigWhat, a website focused on entrepreneurship, 136 e-commerce firms shut shop between November 2012 and April 2013. According to other data from Allegro Capital, an investment banking boutique in Bangalore, 80% of all Indian e- commerce companies are on their last legs, having failed to raise fresh funds. Between 2010 and 2013, 52 e-commerce firms raised some $700 million in funding, but just 18 of them attracted a follow-up round.
    In the past year to 18 months, there has been a substantial clear-out in India’s e-commerce space, as investors have been wary of investing in this space, either backing largescale players such as Flipkart or putting smaller amounts into high-margin niche start-ups. 

The Other Challenger Snapdeal’s co-founder and CEO Kunal Bahl says that with their initial focus — on group buying — the company risked being swept away in this tumult. Instead, Snapdeal pivoted from its early focus to also become perhaps India’s largest marketplace with some 20,000 sellers on its platform. Now, Bahl claims, the firm is on track to clock revenues of $1 billion — within five years of starting up.
    “When we launched in the group buying segment, we were the seventh player and in six months there were 50 more rivals jockeying with us,” says Kunal Bahl. “We got 70% market share in 14 months and, when we decided to change business strategies, our idea was called ridiculous, stupid and dumb.”
    Despite the criticism, the founders of Snapdeal persisted and, backed by funding from the likes of eBay, today claim they are months away from clocking revenues of $1 billion. “Had we run an inventory business, we would have been a distant follower,” says Bahl. “From being six steps behind in the race, we went to being four steps ahead.”
    He points out that from an overcrowded market of some 800-1,000 companies in 2011, only a handful survived and Snapdeal’s decision to pivot its business model helped it be one of them. “We have five million products on our site and we’re adding a new product every 30 seconds.” Bahl wants to face up to Amazon’s might and is confident of putting up a strong fight.
    Despite the aggression of its domestic rivals, Amazon’s Agarwal is unmoved. “There is significant potential for innovation to improve customer experience,” he contends. “While Indian e-commerce is growing rapidly, it is still in nascent stages. It’s truly Day 1 for e-commerce in India and we are committed to aggressively invest over the long term and relentlessly focus on earning customer trust.”
    Rather than building a monopoly in India, he admits there is space for multiple formats and players here. “We are going to relentlessly focus on expanding our selection, bring significant cost savings, provide fast and reliable delivery, and raise the bar for online shopping experiences in India, much like we have done everywhere else in the world,” adds Agarwal.
    Despite Amazon’s swagger, Flipkart isn’t easily intimidated — Bansal the CEO is working overtime to keep the fires going. When ET Magazine spoke to him in Bangalore, it was his wedding anniversary and he spoke to this writer in between attending a public function and before getting to other official meetings and calls. “We are constantly thinking of new ways to grow the business,” he says. “In a few years we want to go from a few thousand sellers to millions of sellers on our platform.”
    Flipkart can expect some stout competition from Amazon in this race to accumulate sellers. “We offer the most comprehensive suite of options for sellers to grow their business online and make profits in India,” boasts Agarwal of Amazon. He points to solutions such as Fulfilment by Amazon (FBA) service, a pay-as-yougo fulfilment service, as enticements for sellers, wherein Amazon takes care of packing, shipping and delivery of sellers’ products.
    “We strive to do the heavy-lifting on their behalf while they focus on their core business functions,” adds Agarwal. Today over 75% of units shipped are FBA. Over 200,000 products are available for next-day delivery on Amazon. Over 60% of existing demands are already eligible for next-day shipping.
    Amazon isn’t holding back in its pursuit of both sellers and buyers. Another initiative it is aggressively rolling out is Amazon Easy Ship, an assisted shipping service that makes it easy for sellers to ship products across India. With Easy Ship, after order confirmation, sellers pick and pack the shipment, confirm to Amazon that they are ready to ship and Amazon collects the shipment and ensures that the product is delivered to the customer. Sellers benefit from low shipping rates, COD and pre-paid orders, scheduled pick-ups, faster delivery and automated shipment tracking.
   
    It is this headroom that both Flipkart and Snapdeal are chasing, with varying strategies. Analysts and investors say that Flipkart has built a stronger brand for itself due to its stronger urban reach and positioning, while Snapdeal is stronger in the hinterland. Flipkart is also the more valuable of the two — it was valued at $1.6 billion in its last round of funding — compared with $400 million for Snapdeal (as in February).
    Both Flipkart and Snapdeal are bulking up with an eye on the future. Flipkart’s chief executive Bansal told this writer in a previous interaction at the headquarters in Bangalore that the firm was open to inorganic growth. One such deal may shortly come its way, as it seeks to nail down a protracted deal for Myntra, a provider of fashion and apparel online. While the deal appeared to be progressing on schedule, at least two investors said the Myntra team balked at a final valuation.
    To try to have the scale to compete with Amazon, Snapdeal too is keen on inorganic growth. Most recently it acquired Doozton, an online product discovery firm, to expand its presence in apparel and fashion. Previously, it acquired Grabbon, Esportsbuy and Shopo to expand into areas such as sports equipment and Indian handicraft and strengthen its presence as a full-fledged e-commerce market place. “We are accelerating before takeoff,” says Bahl of Snapdeal. “E-commerce is going to be a $100-billion industry in the next 10 or 15 years and we need to stay nimble and scrappy and pick our battles.”
Even as both companies add muscle to their businesses inorganically, the real scale may come the hard way — from adding new categories and products to their baskets. For example, Flipkart has rolled out a range of furniture and wants to expand its presence in white goods. Snapdeal too is constantly ramping up several categories — including some unexpected ones such as car tyres where it is seeing strong sales. “People are buying sets of four tyres worth 40,000-50,000 online,” says Bahl. It also stocks 600 types of air-conditioners, 300 varieties of refrigerators and 400 water coolers from an assortment of sellers.
 E-commerce industry is graduating from one where companies are relentlessly chasing consumers to the next phase, where companies focus on value-added services such as supply chain and logistics and on how to retain customers, rather than spend precious money on lassoing new ones. Having been beaten to the punch by Amazon, Flipkart and Snapdeal are both hoping to make up for lost time with their competing offerings on this front.
“Value-added services will be the next big battle in India’s e-commerce market,” says Bansal of Flipkart. The firm, which launched eKart, its in-house logistics arm around a year ago, is now preparing to offer its services to third parties.
Even as Flipkart, Snapdeal and the rest of India’s e-commerce industry fortify themselves against Amazon, the multinational behemoth is setting itself to face the onslaught. “We are committed to the India market and we continue to invent and invest on behalf of customers,” says Agarwal of Amazon India. “With Amazon.in, we endeavour to build the most trusted and convenient shopping experience.” With revenues north of $200 million, according to industry estimates, Amazon India may have already laid down a daunting gauntlet for its Indian rivals. 


Flipkart & Snapdeal: Same, yet different
Flipkart FOUNDED IN: Sept 2007
INITIAL BUSINESS: Books
CURRENT BUSINESS: E-commerce marketplace
FOUNDERS: Sachin Bansal and Binny Bansal
FIRST OFFICE AND RENT: 800 sq ft cubbyhole in east Bangalore for a monthly rent of 800
FIRST BUSINESS TRANSACTION: John Wood’s Leaving Microsoft to Change the World for 200
HEADCOUNT: 10,000
REVENUE: $1 billion
INVESTORS: Accel Partners, Tiger Global, Naspers, ICONIQ Capital, Sofina, Vulcan Capital, Dragoneer Investment Group, Morgan Stanley Investment Management
ACQUISITIONS: WeRead, Letsbuy, Mime360 and digital catalogue of Chakpak

“We are prepared to take on global rivals. We are strongly customer-focused and we have the best logistics, supply chain and technology in the industry”
Sachin Bansal, co-founder &
CEO, Flipkart 

Snapdeal FOUNDED IN: Feb 2010
INITIAL BUSINESS: Local merchants’ marketplace
CURRENT BUSINESS: Fullfledged marketplace
FOUNDERS: Kunal Bahl & Rohit Bansal
FIRST OFFICE AND RENT: 300 sq ft basement of a house in New Delhi at 14,000 per month
FIRST BUSINESS TRANSACTION: Made by Rohit’s wife Parul for a restaurant called Salsa Salsa in Gurgaon. It was for 400
HEADCOUNT: 1,300+
REVENUE: Nearing $1 billion*
INVESTORS: eBay, Intel Capital, Bessemer Venture Partners, Nexus Venture Partners, Silicon Valley Bank, Recruit Corp, Kalaari Capital and IndoUS Venture Partners
ACQUISITIONS: Doozton, Grabbon, Esportsbuy and Shopo
                                                              * Market estimates as company does not reveal 

“We are accelerating before takeoff. E-commerce is going to be a $100-bn industry in 10 or 15 years and we need to stay nimble and scrappy and pick our battles”
Kunal Bahl, co-founder & CEO, Snapdeal  

 The big squeeze in e-com Around 80% of Indian companies are on their last legs, says a recent study by Allegro Capital
Almost no Indian e-commerce firm has turned a profit and investors are asking tough questions of promoters 136 e-commerce companies shut shop between November 2012 and April 2013, according to NextBigWhat Between 2010 and 2013, 52 e-commerce firms raised some $700 million in funding, but just 18 of them attracted a follow up round With VCs getting picky and FDI not allowed in inventory-led e-commerce firms, more firms could go belly up.

 Ref: An ET Article By :: Rahul Sachitanand

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The Power Of Connected Commerce In Today`s New Retail Environment

CONVERGENCE of Retail & E-Retail : An opportunity Not An Option Anymore!! 

 

1. Opportunity for Retail --- 3 Pillars

I- Overall Retail Market Size $ 500 Bn. Organized 8% - $ 40 Bn
Online-Retail has grown to $ 3 Bn in just 3 years from 2010-11.
By 2016-17, it is expected to increase 3 times to $ Bn.
So Can We Play A Role Here??
II-We are 1.2 Bn population. TG- 200-250 Million (Top SEC A & B, The Consuming Class). Internet Population expected to be 300 Million this year. 60 Million searching Online Portals. In 3 years expecting 150 Mn on Online Portals. Are we addressing them??
III- 25000+ Resellers on Marketplace Model Platform of Top 6 Players (Flipkart, Snapdeal, Myntra, Jabong, Amazon, Ebay). So why not we?? 

2. Other aspects of Opportunity are :- 
 
I- World`s second largest Mobile Population and growing. Coming on Online Portals
Opportunity & Threat of Mobile??
II- More n More women are coming on Internet. 40% women by 2015. They are big shoppers.
III- Opportunity in Tier-II & III Towns. Offline Retail is restricted to Big 40 cities. What about the opportunity outside??
1V- 40% shopping queries from Mobile & increasing.
 

This is a consumer led requirement.Companies really don't have an option. Challenge for Companies to give same seamless experience on each channel, same for every user. 

Ref: Excerpts from Indian Retail Congress 2014: A special thanks for the contribution of Mr.Nitin Bawankule-Industry Director- Ecommerce Classifieds & Entertainment, Google Indian Pvt. ltd.

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