Flipkart was founded in October 2007 by Sachin Bansal and Binny Bansal, graduates of IIT, Delhi and former Amazon employees. The company initially focused on selling books online with nationwide shipping. Flipkart slowly gained prominence and by 2008 was recording 100 orders per day. In 2010, Flipkart acquired Bangalore-based social book discovery service WeRead from Lulu.com.
Let us look into the Overview of Flipkart and then we can move on to the SWOT Analysis of Flipkart.
Overview of Flipkart
Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka, India and was incorporated in Singapore as a private limited company. The company initially focused on selling books online before expanding into other product categories such as consumer electronics, fashion, home goods, food and lifestyle products.
The service competes primarily with Amazon’s Indian subsidiary and domestic rival Snapdeal. As of March 2017, Flipkart had a 39.5% market share in the Indian e-commerce industry. Flipkart has a dominant position in the apparel segment, which was strengthened by its acquisition of Myntra, and has been described as “neck-and-neck” with Amazon in the sale of electronics and mobile phones. Flipkart also owns PhonePe, a mobile payment service based on UPI.
In August 2018, US retail chain Walmart acquired a 77% majority stake in Flipkart for $16 billion, valuing Flipkart at around $20 billion.
Did You Know?
Flipkart is the first Indian company to reach 50 million downloads on Google Play Store.
SWOT Analysis Of Flipkart
The SWOT Analysis of Flipkart includes its strengths, weaknesses, opportunities, and threats. And in this reading of the SWOT Analysis of Flipkart, we will examine this beauty and wellness company in terms of its internal and external factors.
S Stands For Strengths ( Internal Factor )
- India’s Largest E-Com Retailer: Flipkart is India’s largest e-commerce company and has achieved a GMV (gross sales value) of $1 billion so far.
- Promoters: Flipkart’s founders, Sachin & Binny Bansal, are ex-Amazon employees. Their experience in the e-commerce industry has helped the founders work strategically and differentiate their company in a highly competitive market.
- Acquisitions: with a series of acquisitions like Letsbuy.co, chakpak.com, weread.com, Mine360 and the recent acquisition of Myntra, the company has been able to expand into e-commerce space and leverage the capabilities and existing resources of the acquired companies.
- High brand recall: Flipkart has established itself as a renowned e-commerce company in India through TV advertisements, online branding and its social media presence. Brand activities like ‘Big Billion Day’ have significantly increased the brand recall of the company.
- Own payment gateway and logistics arm: The company’s logistics arm E-kart and payment service provider Payzippy have helped the company control its expenses. As a result, the benefits are passed on to the end customers.
- Exclusive & wide product range: Exclusive rights to launch some products like Google Pixels, Google Buds, and other personal designer segments in the apparel category have helped the company to differentiate and localize its offering.
- Market Share & Financials: Flipkart has a market share of 39.5% & Flipkart has an annual revenue of US $6.1 billion.
- Strong Promoter: Flipkart holds a 77% stake in Wal-Mart, a global retail giant. Its previous experience in the e-commerce industry helped the founders strategize and differentiate their company in a highly competitive market.
- Brand portfolio: Flipkart has built a strong brand portfolio. The SWOT analysis of Flipkart confirms this element. The brand portfolio of this company can be extremely useful when it wants to introduce new product lines.
- Good ROI: Flipkart is relatively successful in launching new ventures and earns good profits through its existing business. The company earns a good return on its investments.
- Good Advertising Revenue: Flipkart charges extra for advertising the products of its sellers. This model is always beneficial for the company.
- Large Employee Base: Flipkart has more than 30,000 employees.
- Training For Its Employees: high-level personal skills can be acquired through training and development programmes. Flipkart provides continuous training and development to its employees which results in an enthusiastic and motivated team.
W Stands For Weaknesses ( Internal Factor )
- Limited Distribution: Flipkart has limited channel reach, though the logistics department has kept costs low. This is a weakness of the company as it has limited reach. Global giants like Amazon and eBay can deliver their products to any part of the country thanks to outsourcing. Flipkart, on the other hand, is still struggling in this area.
- Cost of Acquisition: Since Flipkart acquires a large number of customers through online advertising, the cost of acquisition is high due to stiff competition in the market and low customer retention. According to Flipkart, the company spends an average of Rs. 400 to acquire a new customer.
- Buyers have the power: Since there are a large number of players in this industry, buyers have a large number of options to choose from. Shoppers save money on switching costs as they can easily switch from one online retailer to another. The same products are offered on multiple online retail websites. There is virtually no product differentiation, so the battle is solely on price.
O Stands For Opportunities ( External Factor )
- Business Expansion: by focusing on other emerging markets, a company can increase revenue while benefiting from economies of scale.
- Increase In Category: This increases the customer base while decreasing the cost of customer acquisition and switching.
- Change in Interest: As more and more customers are getting comfortable with online shopping and the number of internet users in India is increasing, there are huge opportunities in this industry.
- Supply Chain System: by optimising their supply chain, they can compete with the other players and manage the loss of sales due to the product not being available due to supply shortages.
- Global Markets: Similar to Amazon, Flipkart can gradually start expanding its business outside India and do business in other countries as well, which will help in growing its revenue.
- Consumer Behaviour: The new trends in consumer behaviour will open up new opportunities for Flipkart. This is a great opportunity for the company to expand its revenue streams and diversify into new product categories.
T Stands For Threats ( External Factor )
- Intense competition: There is fierce competition between global players like Amazon and eBay and local players like Snapdeal, Tolexo and Shopclues who are constantly trying to take market share from each other.
- Government regulations: Government regulations on issues such as foreign direct investment (FDI) in multi-brand retail have significantly hampered the growth of the e-commerce industry in India.
Also, Read the SWOT Analysis Of Nykaa in a Simplified Way.
SWOT Analysis Of Flipkart Key Takeaways
The SWOT Analysis of Flipkart highlights where the brand currently stands and its threats in this era. Following the detailed SWOT Analysis of Flipkart Here are a Few Important Key Points.
- Indian Brand
- Strong Promoter
Following the detailed SWOT Analysis of Flipkart, we have a few suggestions from Business Mavericks:
- Needs to focus on getting profits
Flipkart STP & USP
- Segment: Customers who prefer the online shopping medium.
- Target Group: Middle and upper-middle-income online shoppers.
- Positioning: Flipkart is an online store that caters to all customer needs.
Flipkart has a wide range of products in many segments
- Amazon.com, Inc. is an American multinational technology company focused on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is one of the Big Five in the American information technology industry, along with Google (Alphabet), Apple, Meta (Facebook), and Microsoft. The company has been called “one of the most influential economic and cultural forces in the world” as well as the most valuable brand in the world.Jeff Bezos founded Amazon on July 5, 1994, in his garage in Bellevue, Washington. The company started as an online marketplace for books, but then expanded into selling electronics, software, video games, clothing, furniture, groceries, toys and jewellery. In 2015, Amazon overtook Walmart as the most valuable retail company in the United States by market capitalization. In August 2017, Amazon acquired Whole Foods Market for $13.4 billion, significantly expanding the company’s presence as a physical retailer. In 2018, Amazon Prime, its two-day delivery service, surpassed 100 million subscribers worldwide.
- Paytm is an Indian multinational technology company specializing in digital payment systems, e-commerce and finance, headquartered in Noida, Uttar Pradesh. Paytm is currently available in 11 Indian languages and offers online usages such as mobile recharge, utility bill payments, travel, movie and event bookings, and payments at grocery stores, fruit and vegetable shops, restaurants, parking lots, toll booths, pharmacies and educational institutions using the code Paytm QR. As of 2020, Paytm is valued at $16 billion.According to the company, more than 2 crore merchants across India are using its QR code payment system to accept payments directly into their bank accounts. The company also uses ads and paid advertising content to generate revenue.
The company had expected to raise around 18,300 crores. Paytm’s IPO was closed for investment on November 10, 2021. The company had kept the price range for this IPO from Rs 2,080 to Rs 2,150 per share. Around 10 am, this stock opened Rs 1955.00 on the BSE and continues to plummet. Similarly, it opened Rs 1,950 on the NSE. In the closing session, it was trading at Rs 1,560.00.
- Snapdeal is an Indian e-commerce company based in New Delhi, India. The company was founded in February 2010 by Kunal Bahl and Rohit Bansal, graduates of the Wharton School and the Indian Institute of Technology Delhi, respectively.
- Brand Deliveries: Nowadays brands are directly selling their products through their delivery system by partnering with logistic companies like Delhivery and others.