
India's Flipkart Has an Amazon Problem - petethomas
http://www.bloomberg.com/news/articles/2016-07-18/india-s-flipkart-has-an-amazon-problem
======
nnain
Too much negative commentary. Flipkart also did something interesting that
fueled their early growth - they offered 'Cash on Delivery' model, cause many
people in India don't use Credit/Debit cards for shopping! I never had a bad
buying experience with them, but then my shopping has been limited.

Must say though that Amazon's recommendation engine and technical prowess in
general is superior. I imagine so are Amazon's warehousing robots and
logistics. Also from what I once heard, their Vendor Managers are more
efficient (and aggressive) in dealing with the merchants.

To me Flipkart's weakness in strategic vision started showing up in dealing
with the fashion segment - I never understood such an upmarked Myntra
acquisition. They already had the fashion segment on their site back then! And
then they got even more heady and switched to an App-Only Shop for couple of
days. Whoever, initiated and approved that move!! (Side note: Flipkart
founders are ex-Amazonians.)

~~~
jdkanani
You underestimated the power of Amazon here - it's not technical prowess or
recommendation engine. The war was never about technical prowess. It's
Amazon's customer service which pulling Flipkart/Snapdeal down to the ground
and beating them hard.

~~~
balladeer
Agreed. I have been using Flipkart since they launched. Amazon customer
service and shopping experience are just impeccable, esp when compared to the
competition. And as for Snapdeal, it's usually something just short of a
nightmare.

Another aspect is user experience while using their apps and websites. Click
any Flipkart link from a mobile browser or an app like Twitter, you'll reach
their `Install our app` page. Nothing else. You can't do anything if you have
not installed their app. While Amazon simply lets me see the product or even
buy it from right there while showing install app or view in app in a corner.

Whenever I see that Flipkart page asking me to install their app to see a
product I feel satisfied that I don't have it installed. I just close the
browser tab.

I just checked and last time I bought something from Flipkart was around 2
years ago. It was the Xiaomi MI3 phone which was available only on Flipkart.
Last Snapdeal purchase was some 1.5 years ago. I wish I could spread my
purchases across these portals just to help avoid a monopoly kind of scenario
but these options are just too bad to go with.

------
anupshinde
I've used both Flipkart and Amazon(India) sites.

1\. For me, Flipkart's introduction was only due to the huge discounted
prices. Also it was new, better and trusted experience compared to
Ebay(India). And Amazon came late in the game. Mentally I associate Flipkart
with huge Discounts (and Mi phones). And those discounts don't exist any more.

2\. Amazon.in is just a great user experience. Flipkart.com still feels like a
site with ads (but those aren't ads :). In its first few months - Amazon.in
was terribly slow - but now thats never a problem. Now Amazon is easier to
surf and look at and the rates are almost similar

3\. Flipkart has a trust problem with many users and its just harder to fix
that. On one account they had no-idea where the item was. After a lot of
delay(about a week) - they sent me the same item twice and they didn't realize
it. After a week I wrote back to them to collect the duplicate item and I got
the response below:

"This is due to the fact that most our courier partners are tied up with us
for deliveries alone and some of the locations are currently not serviceable
by our pick-up partners.

Once the product is reaches us, I assure you that the courier charges you
incur will be reimbursed to your Flipkart Wallet and you’ll receive an
automated e-mail as soon as your wallet is credited. This has unlimited
validity.

Kindly pack the product in the brand box if any with the MRP tag and send it
to the below mentioned address with the return ID labeled on it. Also, please
mention your address. "

Why would I hustle to courier them back? And "no pickup partners in that area"
was a plain lie. I just try to avoid Flipkart after that incident and prefer
buying from Amazon even if it is slightly costlier.

4\. And when they went "Mobile-only"... I was like - I DO NOT WANT THAT APP
(They reversed that BAD decision pretty soon)

~~~
thewhitetulip
I have not bought anything from Flipkart since more than one year. The company
was doomed from the start, I had the chance to see it form their interview
process. It is so broken that I felt it outrageous that it was the _hottest_
startup in India.

Amazon is awesome, because it provides low prices + quality service. It isn't
just "discount retailing"

Flipkart built its reputation on motorola phones because Moto was exclusive on
Flipkart, beyond that they never really picked up, the thing is Flipkart's
quality reduced time over time and their approach itself was wrong, they
started on "discounts" when they should have started on maintaining their
customer service.

But typical Indian business, once they "grow" they don't care about customers
anymore, the only puzzling thing is that how does Flipkart act like it from
now itself, by no definition are they grown or successful or both.

~~~
pm90
How is it typical of Indian businesses? I feel like this is overgeneralizing
that aspect.

I can see what you mean in this specific instance though. I wonder if its just
lack of experience in transitions from a small company to a bigger one in the
India startup environment.

~~~
piyush_soni
It _is_ kind of the general business attitude here, unfortunately.

~~~
Ankurkkhuran
I disagree. That is over generalization.

~~~
piyush_soni
No, it's just _generalization_ , and that's why I said _general_ business
attitude.

------
seibelj
Amazon has earned my trust in every serious interaction I've had with them
(live in USA and have prime subscription). Package never arrived? Reimbursed.
Next day shipping and it took 2 days? Reimbursed. "New" book from reseller is
clearly marked up with underlines and notes? Free book, no need to ship it
back.

The trust I have with this company is the reason why I order from them so
consistently, even if they are more expensive. People in India are surely
learning the same thing.

~~~
pjc50
I wonder what the trust looks like in the other direction: if you can get free
stuff by lying to customer service, what happens if that becomes popular in
the customer base?

~~~
Tenhundfeld
Meh, that doesn't seem a huge risk. Lying to customer service isn't a life
hack. It's unethical and a crime. Depending on the specifics, it could be mail
fraud, a felony.

Maybe I'm naive, but I believe most adults are not actually willing to commit
fraud in writing. And besides the risk of prosecution, most people like to
think of themselves as honest people. It's hard to continue that narrative if
you're proactively engaging in fraud.

~~~
pjc50
I was wondering if this varies by country; both the expected extent to which
one should game the system (e.g. prevalence of bribes) and actual ability of
the authorities to prosecute people.

~~~
Tenhundfeld
Ah, yeah, I bet you're right.

------
msravi
I stopped using Flipkart when they went pushy with their mobile app. If you
went to their website on a mobile, it just insisted that you download the app,
with no other option, which I didn't want to do. I just went to amazon.in

Edit: Coming to think of it, as a personal anecdote, I pretty much use the web
for a lot of stuff now. News (firefox bookmarks), Social (twitter, linkedin),
Shopping (amazon) - it's all the web. There used to be a time when I had
privacy/battery sucking apps for them all. I still use apps for Navigation
(google maps), Messaging (whatsapp, sms), Mail (gmail), Music (native player),
and Cab-hailing (ola) though.

~~~
parthdesai
Just checked Flipkart's website and it's not even responsive. Horizontal
scroll appears at width of 1284 pixel. I think this in 2016 is just insane.

~~~
vthallam
Not sure what are you looking at. They do have a great mobile website and i
could see it.

~~~
squeaky-clean
It's only mobile though. Try visiting it on a desktop browser. If you have
your screen stretched out enough to be considered "landscape", you only get a
screen showing "Please rotate your device"

------
dingo_bat
Flipkart has had this coming. They grew too confident, even to the extent of
making significantly anti customer moves. Whereas amazon make you feel like
you are the center of the universe.

Another problem is that amazon's retail business is not a big earner, even
after so many years. But all flipkart has is retail. They don't have the
technical superiority to do something like aws.

Think about it. Flipkart offices are some of the best places to work. They
hire the smartest, pay a lot and there's a lot of autonomy at work. But u
didn't make sense for maintaining a website. A small team of IT guys can do
that. They are competing in retail, where other stuff like logistics and
partnerships and marketing matter. Not the design of the website. What are all
those software engineers doing? They're definitely not building an aws.
They're just maintaining the website.

~~~
mandeepj
Their engineers are not only maintaining that website, they are - 1\.
Maintaining app 2\. Recommendation service 3\. Search 4\. Analytics 5\.
Modeling 6\. Handling a website used by millions of users is not an easy thing

Not trying to defend flipkart, only sharing my perspective

------
steve19
Surely this is nothing that Flipkart cannot fixed without some lobbying?

I am not trying to be facetious, India is very protectionist. Amazon can only
operate as a marketplace, not a seller, yet they have one seller accounting
for as much as 50% of sales ... a little suspicious.

The Indian govt. has introduced regulations, no doubt from Flipkart lobbying,
to remedy the situation [0].

Amazon must be dumping money into Indian operations in order to kill
competitors and hope once they have a monopoly, they can raise prices and
lobby the government themselves.

[0] [http://fortune.com/2016/04/08/amazon-regulatory-hurdles-
indi...](http://fortune.com/2016/04/08/amazon-regulatory-hurdles-india/)

~~~
dingo_bat
We do not have lobbying in India. It's called bribing, and I doubt flipkart is
doing it. Entrenched companies like reliance/tata are known for that but
smaller ones like flipkart cannot take the risk of getting caught.

~~~
pkd
> Entrenched companies like reliance/tata are known for that

Tangential to the topic, but can you point out where has Tata been found to
have been indulging in that? If I recall correctly, Tata has refused to work
with the Government when it required them to do something illegal on multiple
occasions. This is why Tata went out of the airline market.

~~~
geodel
You can search for Tata group role in 2G scam. I don't know what is current
status of case. But Tata group was lobbying with then Telecom minister. One
example of probe into Tata conduct:

[http://www.firstpost.com/business/corporate-
business/2g-scam...](http://www.firstpost.com/business/corporate-
business/2g-scam-ex-niira-radia-firm-under-scanner-as-cbi-probes-tata-realty-
unitech-deal-1984347.html)

But you can find a lot about this case. The point being Tata or anyone are not
absolutely clean.

------
jayadevan
Here's what Flipkart is planning to do about it.

\- Shrink marketplace model. \- Increase inventory led sales. \- Tighter
quality control. \- Work with large retailers & cut down on the seller base.
\- Bring back private labels. \- Build financial services ecosystem.

A detailed account on how Flipkart is trying to mend its ways is here:
[http://goo.gl/zRZ1FP](http://goo.gl/zRZ1FP).

~~~
puranjay
FK sold me a FlipKart first membership for Rs. 500/year. When I tried to use
it, I realized it was only for products sold by WS Retail. Of which there is
an ever shrinking quantity.

Pretty crappy experience honestly.

------
unchaotic
Amazon has a lot of cash & experience to pamper customers but once it wins
over, all that'll change. The best outcome for millions of customers is to
have 1 or 2 strong competitors to Amazon that'll be around for a long time to
come. Else you'll be stuck with Amazon's monopoly !

~~~
mandeepj
Amazon never changed in US. They are number 1 here

~~~
ryao
Prices have steadily crept upward, especially since Amazon started to branch
out into video streaming. Prices have become so bad that I am discontinuing my
prime membership when it runs out in 6 weeks.

I am consistently finding things cheaper on any of eBay, jet.com and Newegg.
With shop runner from my Amex card, I often get free second day on Newegg.
Then jet.com gives second day for free. eBay does not, but unless the seller
is in China, I get fairly quick shipping.

In any case, monoprice and newegg are consistently cheaper on their main items
(cables at monoprice and computer parts at newegg) while jet.com and eBay
often beat Amazon by incredible margins on just about anything. I recently
brought a Xeon E5-1670 for only $40 and 5lbs of paprika for only $10.49 a lb
from eBay. Amazon's pricing was far higher.

I also purchased various pantry items and bananas from jet.com. They were not
only cheaper than Amazon, but they were cheaper than the best brick and mortar
store deals (which are also consistently better than Amazon), in one case
being better by a factor of 2. The bananas were also packaged with reusable
refrigerant packs that would have likely cost me more than the $0.81 each of
the two banana bunches cost.

I am at the point where I am ready to stop looking up prices on Amazon because
I expect one of the other sites to not only have the item, but sell it for
significantly less. If by some miracle Amazon does sell it for less, it ought
to appear in a search on Google shopping or pricegrabber.com.

I feel like Amazon has started taking its customers for granted. It is like
they no longer feel compelled to compete on price because they expect people
not to compare under the now false assumption that Amazon's pricing is good.
Getting good pricing from Amazon requires using a side like camel camel camel
or price zombie and playing a waiting game with them when the price is high,
which is almost always the case.

Also, unlike Amazon, you can often stack cash back sites like top cash back,
be frugal and fat wallet with purchases at other sites thanks to their
affiliate programs. There are even comparison cashback sites like
cashbackholic and cashbackmonitor. eBay is the only notable exception in
making cashback limited to a small number of categories at most cashback
sites.

If you have not noticed a change, you do likely not do comparison shopping to
be able to have noticed.

~~~
phatfish
I noticed Amazon are not the cheapest anymore. However often the free shipping
option with Amazon is not matched by other retailers. Amazon looks more
expensive unless you factor that in, then they are the same or cheaper.

However if you spend enough at another retailer to get free shipping then it
can be a much better deal.

I assume Amazon's scale allows them to put the delivery companies under a lot
of pressure, so they push the free delivery to smaller spends which means they
don't have to compete so strongly on the item price.

------
achow
Flipkart still has a big 'brand equity' outside metro. Today in small town
online shopping means 'Flipkart' (the way Search = Google). And in these
places eCommerce solves real life problems. The addressable market is huge and
still untapped to large extent.

Most of these places 'Amazon' is still an alien word (but that is changing -
albeit slowly).

However, the way I see it there is a little window where Flipkart can still
leverage their brand reach, by not loosing the customers while they cleanup
their act. Most of these customers would still put up with troubles as they
perhaps have a big inertia in moving to a new shopping experience. But it is
matter of time.

Flipkart in my experience do not know how to hire people. I have seen top
level product management and design - they would not stand a chance when it
would come to out thinking and out executing Amazon.

[Edit] And add the fact that Amazon India can willy nilly use the code base of
Amazon.com. Till sometime back (perhaps even today, haven't checked recently)
Flipkart didn't have any personalization feature in their mobile app. There
was no mechanism of surfacing products based upon purchase history or even
browsing pattern. It didn't even remember where I last closed the app - every
d*&^% time I had to navigate and reach to the place where I was interrupted
and had left the app.

------
rocky1138
I remember reading about Flipkart when they turned off their website. At the
time I thought that was a potential terrible sign of things to come (moving to
walled garden mobile apps instead of URLs and websites).

Thankfully, hardly anyone of consequence followed suit and the move was widely
seen as a disaster.

~~~
sunnyps
They came back to the web with "Flipkart Lite"[1]. Despite the name it's
actually pretty good from what I've heard.

[1] [http://stories.flipkart.com/introducing-flipkart-
lite/](http://stories.flipkart.com/introducing-flipkart-lite/)

------
geordee
In my opinion Amazon helped Flipkart grow. If there wasn't any worthy opponent
the growth would have been less aggressive. Now that the aggressive growth has
plateaued, it makes sense to grow smarter.

~~~
nitinreddy88
Fact is, Amazon in India picked up in last 2years only while Flipkart already
made its mark and doing billion dollar business.

~~~
mabbo
What changed, in your opinion? Why now, for Amazon?

~~~
nitinreddy88
As an ex-myntra (part of flipkart) engineer, the efficiency of the engineering
systems is too low. Tried too many things by taking customers satisfaction for
toss. App only is the worst thing they tried out and it backfired alot. At the
same time Amazon stuck to basic principles like customer satisfaction and
quality of the services.

~~~
vthallam
Since you were part of Myntra, may be you can answer this.

Why does the customer service suck in general? Do they not invest enough in
the technology, service people?

------
puranjay
FK is done and dusted. It still has a strong brand presence but it has failed
to capture the younger segment of the market. And this is the segment that
often tells older consumers where to shop.

Case in point: my mom doesn't know what Amazon is, but knows about Flipkart.
When she asked me how to shop for a particular item on FK, I told her to use
Amazon instead.

She is now an Amazon customer. To her, it's one and the same thing, and Amazon
is more trustworthy because it was recommended by her tech-savvy son

------
wtmt
Personal observations: Indian consumers are highly price sensitive, and will
usually go for the cheapest option. Saving money, bargaining and price
comparison are almost ingrained in the culture. :) With this in mind, I wonder
who buys from Flipkart and what reasons they have to buy from there (just
familiarity?), because its prices are usually a lot higher than Amazon.in or
Paytm or Snapdeal. The product selection (in electronics, kitchen items) is
also smaller on Flipkart compared to Amazon.in.

Whenever I have checked Flipkart in the past to see if the price was
comparatively lesser, I've provided feedback on the price, the specs listed
(incomplete), and so on, right on the product page. But it doesn't look like
any of that feedback was ever acted upon. For what it's worth, Amazon.in
didn't act on any feedback that I have provided several times either (it fails
miserably on simple things like sorting products by price or by another
attribute, and hasn't gotten it right till today). Technology and website
wise, both Flipkart and Amazon.in look like they're designed and developed by
incompetent development teams, along with a product data team that has very
little clue on product attributes and how to list them. The managers in both
companies don't seem to care either.

The app-only strategy by Flipkart (which was quickly reverted) and Myntra
(reverted last month) was a bad idea from the beginning. The apps involve too
many taps and navigation back and forth between screens to refine searches or
find things. The more tech-savvy people distrust apps and also prefer a better
shopping experience by using larger screen desktop/laptop browsers to open
multiple tabs and compare prices (and maybe not logging in and clearing older
cookies to avoid any user profile based bias that changes prices for certain
users).

------
li-ch
China's e-commerce sites don't have such a worry. They have Great Firewall.
Trade barrier works! /s

~~~
dingo_bat
I don't think that /s is necessary. I think the years have proved that china's
trade barrier has worked wonders for home grown businesses. Look at didi
chuxing. Blindly aped uber and worth more than them now. On the other hand
look at India's own uber competitor: ola. They're struggling almost as much as
flipkart while uber thunders ahead.

~~~
morgante
Of course trade protectionism is good for the protected industries. That
should be self-evident.

The more important question is whether the benefit to domestic industry
offsets the harm to consumers. Traditional economics would say no and I'd be
inclined to agree.

~~~
li-ch
Amazon is years ahead in customer support and services. Yes. but in terms of
products sold, I'd argue that they are mostly the same: made in China or
southeast Asia.

~~~
morgante
Almost anything can be bought on Amazon, but yes the majority of all products
in the world are produced in Asia. I'm not sure why that's a bad thing.

------
sumitgt
I still don't understand why they made the weird move to be "Mobile Only". It
was insane.

On a side note, I'm a little weary of CEOs who have pictures of Steve Jobs up
on walls and try hard to emulate him. Just because that style of leadership
worked at Apple doesn't mean it works everywhere.

------
codemod
A while ago.. I read a very interesting and detailed article about the same
thing.. [http://www.foundingfuel.com/article/saving-private-
flipkart/](http://www.foundingfuel.com/article/saving-private-flipkart/)

Worth reading to compare and highlights the some of the points in the above
article with much more detail..

------
walrus01
I'm curious: How does an ecommerce physical product delivery service in India
solve a major problem, namely that there are taxes and customs tariffs when
goods are transported exclusively within India, from warehouse to customer
delivery location, across Indian state boundaries? I've seen the queues of
cargo trucks waiting at state borders for tax purposes and it seems like a
grossly inefficient bureaucratic nightmare.

------
known
1\. amzn.in

2\. flipkart.com

3\. snapdeal.com

AND

4\. shopclues.com

~~~
dingo_bat
Am I missing something here?

