Flipkart and the lure of Billion dollars

I’m quite impressed by the growth of Flipkart in the last 8 years or so. The Bansal duos have executed their business model to perfection. After working on series of startups and startup ideas I can safely say that ideas are dime a dozen but execution is what really matters in the end.

I had a interesting discussion with my friend Vivek Joshi on what sets Flipkart apart from other players like indiatimes and rediff who were much older had more money or deep pockets.  After all e-tailing was not new in India. What made a huge difference in the case of Flipkart was that they introduced innovation that other players for some reason were hesitant to implement.

The first innovation was game changer. You buy books because you want to read them immediately. That is why we go to book stores, flip through books and buy and take them home to read. Flipkart got this bit of customer behaviour right. Flipkart insured that you will get books cheaper and faster, sometimes as fast as the next day. I remembered the first time I ordered a book on Flipkart it was delivered to me in less than 24 hours. I was hooked from there on and I told others to buy from them.

The second innovation was to include all the inventory of the books including international titles. There was no difference in inventory between Amazon and Flipkart. What you could buy from Amazon, you can get it from Flipkart too. So for much less price ( compared to Amazon) you can order a book paying indian rupees and get it delivered to your home.

These two innovations in our opinion made much difference to the image of Flipkart. More and more people bought books from them and the rest is history.

However customers change but customer behaviour take lots of time to change. What made Flipkart hugely successful can also be its achilles heel. And now especially they are cash rich and huge and have different pressures point.

For instance now they have started charging for delivery. Indian customers are very price sensitive. They would not mind searching on other sites like infibeam or homeshop18 and buy from the place where the total cost of buying is less. This is something Flipkart will have to watch.

Flipkart has raised 1billion dollars more. Amazon is putting 2 billion dollars into its india operations. But for what its worth round one has clearly gone to Flipkart.

I don’t know who will win the war between Amazon and Flipkart. May be both will win or may be there will be a third e-retailer to upset the cart. But what is  amazing is that a bunch of youngsters with fire in their belly have created such a successful enterprise and are dreaming to create India’s first 100 billion dollar e-retailer. Well done guys, now bring to some more heat in the Indian e-commerce space.

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