Several weeks ago Flipkart was the cover story in the July 6, 2012 issue of Forbes India and it was a fairly controversial piece as the sub-title declared “India’s e-commerce darling is headed for a fall.” It was one of the most commented pieces on the Forbes India site and links were flying all over the interwebs.
I think it’s easy to lose sight of what Sachin and Binay Bansal have created in such a short period of time. Indiaplaza.com has been around since 1996 and has not reached the scale of what Flipkart has done in 5 years. Flipkart has created many new online shoppers that would have never dreamed of buying anything online in India. The Bansal’s are true entrepreneurs who essentially re-shaped a market out of thin air with nothing more than a website, books and desire.
I first used Flipkart in January 2011 when I was trying to buy a friends book (The SaaS Edge) which was not available at Crosswords at the time. Since then I’ve used them for countless purchases and delighted with their rock bottom prices and their under promising (estimated delivery in 4-5 days) and over delivering (actual delivery in 1 day). How could you not love that? Having used Amazon.com in the US for over 10 years, I was skeptical of online shopping in India because of online credit card fraud or e-tailers not processing a refund. Flipkart single handedly turned me from a skeptical shopper into an online shopper.
However, since the Forbes India story was published my usage at Flipkart is zero. The simple reason is price, they are no longer the low-cost option when buying books. Recently, when I was about to order some books I checked HomeShop18 and Indiatimes Shopping and found them lower. Even though Flipkart has spoiled me with their delivery excellence I really don’t mind if my books come 4-5 days later…they are books not perishable items. And that’s the issue when you compete on price, someone else can come in and drop their prices and take the hit on the balance sheet if they have bigger pockets. Flipkart spends a lot of money on print and TV advertising which is something that HomeShop18 and Indiatimes Shopping can get at reduced rates since they are part of larger media conglomerates. HomeShop18 is part of the Network18 group which recently sold a stake to Mukesh Ambani’s Reliance Industries. Indiatimes Shopping is part of the Bennett, Coleman and Co. a media powerhouse which owns many media outlets including the Times of India newspapers.
Can Flipkart survive? In truth no one knows, all this talk is pure speculation. The question is – Is my personal Flipkart experience just my experience or part of a bigger trend where online shoppers will always default to the lowest price option in India? With price aggregation services like Junglee.com it takes a couple extra steps to find the lowest price. I’m guessing for many shoppers like it me it will ALWAYS come down to price, it’s part of our DNA – Do Negotiate Always.