
Saving Private Flipkart - gwintrob
http://www.foundingfuel.com/article/saving-private-flipkart/
======
ajonit
As a long time customer and admirer of Flipkart, I have no hesitation in
saying that there is something massively wrong at Flipkart. Earlier FK used to
be my goto destination for buying anything online, since last 1.5 years things
have changed drastically. Every single product, that i need to buy is either
cheaper on Amazon India or is not available at all on FK- every single
product. Customer service that used to be friendly is not welcoming either. On
the other hand, Amazon India seems to be obsessed about customer service, they
will readily offer you GV for a slightest of mistake on their part. Their
product inventory is massive. Essentially Amazon india has become what FK used
to be 3 years back and FK seems uninterested in doing business anymore.

~~~
ssundarraj
I ordered a ball on FK and a week later I got an email saying that my order
was canceled due to lack of stock. This has happened to me on Amazon as well,
but the difference was that the email from Amazon came in a day or two.

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ved_a
It is so easy to just throw in some vague ideas without any substantial data
behind it. A more logical and researched answer to this article is -
[https://medium.com/@sumanthr/why-private-flipkart-doesn-t-
ne...](https://medium.com/@sumanthr/why-private-flipkart-doesn-t-need-saving-
fa8bf58a9746#.qcegy7dzx)

~~~
Rambunctious
The lynchpin of this "logical argument" appears to be a Business Standard
article that references a Morgan Stanley report that says FK is 4 times as big
as AMZN in GMV. While neither of the two authors (and us included) may have
the "raw data" that Morgan Stanley supposedly has at its command, we don't
need to be geniuses to understand that GMV via exclusive deals with one phone
manufacturer after another can only buy so much PR runway.

What really matters is the bottomline. As Buffett would say, it's only when
the tide goes out (or in this case, when the funding tap runs dry), do you
discover who's been swimming naked. Having said that as a consumer, less
competition means less deals. So, I do hope all the shopping sites have their
swimming trunks on :)

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s4chin
On the basis of customer satisfaction only, Amazon is far ahead of Flipkart at
least in India.

If you search Quora for a Flipkart vs. Amazon, you will be amazed by the
reviews (most favour Amazon).

This is just one: [https://www.quora.com/Is-Flipkart-better-than-Amazon-in-
Indi...](https://www.quora.com/Is-Flipkart-better-than-Amazon-in-India)

There are many more such questions on Quora. I've read a lot of reviews and
this was the result: Amazon is more responsive to complaints, returns, usually
cheaper and satisfying the customer. Flipkart is doing way worse than Amazon
in these departments. There are even a few answers about how Flipkart
delivered the wrong product.

~~~
ramkalari
Amazon is not doing a great job either. They shipped a Macbook Air when I had
ordered a Macbook Pro. They didn't release my replacement until their
supposedly superior system registered my returns. I had to contact their
support to tell them that it was returned a week back. After all the song and
dance, they shipped a Macbook Air again as replacement. How is that for a
market leading performance!

~~~
s4chin
True, I was a huge fan of Flipkart since the time it only used to sell books.
Then the delivery charges increased, discount reduced and Amazon and Snapdeal
looked like much better options.

Even now I look at flipkart to check out the price of stuff, but it is usually
more than the rest.

Flipkart lost customers confidence, is what I think.

~~~
ramkalari
I think it is really hard to compete with Amazon on cost. That is Amazon's
strength and you will most likely lose that battle unless the government has
some kind of protective measures in place or you get another titan like
Alibaba or Google taking a majority stake. Flipkart still has plenty of
mindshare but they need to innovate. They are not going to win based on prices
alone.

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dharmon
I feel this analysis is missing the forest for the trees.

Most of this comes down to Flipkart losing money to gain gross sales. However
you may feel about this strategy, it is basically what everyone, including
Amazon, does. Be the cost leader to starve out your competition until they go
broke or go home.

However, Flipkart has two advantages over Amazon:

1) Mindshare. Flipkart is still the #1 association with e-commerce in India.
Obviously this can change fast. Myntra is the only name for online clothes,
which as the article mentions, is higher margin.

2) Flipkart is a local company. In this case it gives them two sub-advantages,
a) they are allowed to sell directly to customers (foreign companies are not
allowed to, Apple is currently trying to get an exception). This forces Amazon
to act as more of a "portal", almost like Snapdeal. b) In India a lot of
people are pushing for "India first" strategies that favor local tech over
foreign companies. This gives Flipkart a slight political advantage.

The article claims Amazon is "nipping at their heels". It's true, but the gap
is much wider than you might think. Amazon pushes how they surpassed Flipkart
in traffic, but in actual sales, Flipkart has a pretty large lead.

Anyways, I wouldn't count Flipkart out yet. Amazon is spending money like
crazy, and they have deep pockets, but so does Flipkart. At this point I'd say
its anyone's game, but with the current advantage to Flipkart.

The real current winners are Indian consumers, getting heavily subsidized
goods.

~~~
sidm83
Most of the points you have made here are grossly incorrect. Here is the
reality :

 _Flipkart is a local company_

No its not. The VC money invested in it is counted as FDI, and even its
holding company is based out of Singapore. So it does not enjoy any such
advantage. Its been several years since Flipkart stopped operating on the
inventory model, it operates on the same marketplace model as Amazon/Snapdeal.

 _The article claims Amazon is "nipping at their heels"._

It's true, but the gap is much wider than you might think. Amazon pushes how
they surpassed Flipkart in traffic, but in actual sales, Flipkart has a pretty
large lead.* Nope. The difference is in the range of only ~20% now. Flipkart
does not have a magical conversion ratio that it sales can be a multiple of
Amazon despite lower visits. You might have been misleaded by considering the
figures of the seller side as well. Need to consider only marketplace
revenues.

 _Anyways, I wouldn 't count Flipkart out yet. Amazon is spending money like
crazy, and they have deep pockets, but so does Flipkart._

Flipkart does not have pockets of its own. Its running on investor money,
which comes with conditions unlike Amazon which can invest its own earnings
from US and elsewhere, well justified owing to earnings growth potential.

 _The real current winners are Indian consumers, getting heavily subsidized
goods._

Can't agree more with this point. FYI Amazon and Flipkart are nowhere close to
the magnitude of cashback offered by Paytm (backed by Alibaba).

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jor-el
As per the recent guidelines by the Govt. of India, "E-commerce entities
providing marketplace will not directly or indirectly influence the sale price
of goods and services and shall maintain level playing field" [1]. This might
be blessing in disguise for Flipkart, as they can concentrate more on profits
and operations, than fighting it out with deep-pocketed Amazon to woo the
customers with discounts.

E-commerece is still upcoming sector in India, and have enough customers for
multiple giants to survive.

[1] [http://www.firstpost.com/business/decoder-100-fdi-in-e-
comme...](http://www.firstpost.com/business/decoder-100-fdi-in-e-commerce-
will-shake-up-the-sector-but-is-not-all-that-revolutionary-2702590.html)

------
r0h1n
Here's a pretty compelling counterpoint: "Why Private Flipkart doesn't need
saving" \- [https://medium.com/@sumanthr/why-private-flipkart-doesn-t-
ne...](https://medium.com/@sumanthr/why-private-flipkart-doesn-t-need-saving-
fa8bf58a9746#.ky6y18acd)

------
puranjay
Everyone keeps forgetting: unlike Amazon, FK has no profit generating units
within the company.

EVERYTHING FlipKart does loses it money. If they don't get funding, they're
toast as a company. If they jack up prices, they lose customers to Amazon.

In this unending war, Amazon has a secret weapon: AWS. AWS is a massive cash
cow for Amazon that's also profitable. This is profit Amazon can keep pumping
back into its other businesses, including the loss making Amazon India
operations.

FK will run out of money before Amazon does. Simple as that.

~~~
gumshuda
And amazon took 15-18 years to make that cash cow. Flipkart will also figure
out something in next few years. For all the negativity for flipkart, they
have much much bigger share in apparel which is the place where margins are
higher and profitability is easier.

And amazon can not keep spending money on India. They have to convince their
shareholders that investing in India will be profitable. So if flipkart being
market leader will not be able to convince someone for more money, it will put
pressure on amazon also for the same.

~~~
exelius
There is no doubt that India will be profitable for Amazon. They're frozen out
of China because of protectionist policies, they already own the US and
Europe, so if they want to grow, India has to be part of that strategy. Given
that their biggest competitor in India is on its heels, I would expect them to
throw _more_ money into the country, not less.

It's not that there's absolute certainty that investing in India will be
profitable -- it's just that Amazon doesn't really have any better options if
they want to continue to grow.

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dingo_bat
Flipkart was good, much better than alternatives. Nowadays I avoid it just
because they wouldn't let me browse their website on mobile and at one point
their entire desktop website was covered with "Download our app!". They even
went so far as to show higher prices on the website than the app. Businesses
should think 10x before forcing their will on consumers, specially if it makes
no sense for the consumer.

On the other hand, I do find Flipkart to be a better organized marketplace for
smartphones. You can filter by manufacturer, OS, price, color, storage,
everything. Also, you get all variants of a phone on the same page. Amazon
shows 5 different listings of the same phone, with different color and storage
options, which is IMO lame.

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muddi900
The important point was in the middle in a few sentences; how FK can't compete
with the algorithm backed d might of Amazon. Amazon just has a more robust
recommendation engine and a customer review system infrastructure that's years
ahead.

