India's Flipkart Has an Amazon Problem
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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.)
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.
Because these methods were so widespread and credit card penetration was low (due to strict consumer credit laws, very, very few credit cards were available well into the 80's, and debit cards were often just ATM cards without a card number), they carried over to many online shops too.
COD model was available way before Flipkart even existed.
> To me Flipkart's weakness in strategic vision started showing up in dealing with the fashion segment
The main weakness with Flipkart are some decisions like making Myntra app only shopping locations. They did it for a full 1 year after reverting back to website access. All this for just more customer data.
Most Indians need to see the clothes, and may be even try them once for the right size. I'm extremely skeptical of buying any clothes or shoes unless I see them.
The only thing people really buy online are stuff they already know about(like the 1.5L Pressure cooker) or throw away stuff.
on the first page as the 4rth result for me.
Nothing new. Online retailers had had that option for years before flipkart arrived on the scene.
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)
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.
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.
Amazon had to cutback on its returns and refunds policy on mobile phones back in Feb/March. Comparatively I can still get refunds on Amazon US.
Logistics is also a nightmare in India which causes a lot of delays.
All I care is that I get a good service. Amazon sends more communication, if their product is delayed, the make sure that they send a SMS. Of course we don't expect everything to be delivered daily
Basically it is obvious since Amazon has been matured into a good product since the past 30yrs!
Sure thing! Only a recent incident when my dad wanted to buy a phone. He isn't tech savvy, but I suggest him I can order one for him and have it delivered to the home. He asks if there are any discounts online? If not he asks why not just go to the shop and spend some time get a look and feel of the product and then buy.
Also regarding Mi phones. Trust me their flash sale was a major cause of concern why most customers felt humiliated to wait for hours and then discover the phones sold out within a second.
>>Flipkart has a trust problem with many users and its just harder to fix that.
A relative ordered two phones, they sent only one in CoD. Reason claimed was they were not sure customer would buy. It sort of became a cause of concern because he was buying for his sisters and it went to some kind of family misunderstanding that he bought it only for one sister.
He cribbed and did a good deal of negative ranting about Flipkart in a family function. My guess is a good 20-30 people were scared away from buying in Flipkart again.
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.
Flipkart from circa 2012 had that. The story should probably more about how they lost that trust.
I used to order things on Flipkart regularly (during my WFH years in Bangalore) because the couriers were employed by them, had multiple delivery attempts in a day and items in general came in a day or two to my doorstep.
At that point, it was as if they treated "shipping" as their primary product rather than the box they were delivering.
For my vantage point, the whole process starts to unravel with "WS Retail" and Flipkart's schism.
Suddenly, it looked there was a split-brain between buying, shipping and delivering.
But companies have made worse mistakes, so who knows.
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.
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.
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...
Uber is being used despite the fact that it is technically illegal because it is so popular with the users.
users matter, even if Amazon dumped billion dollar's in Modi's account, all he can do is urge people to use amazon, he can't or rather no govt official can make flipkart go away.
Also if you read Amazon's book, the story of Amazon, they never ever raised prices, they always have reduced prices all the time. And we Indians have a nice behaviour, we always buy from where we have the lowest price possible!
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.
http://www.firstpost.com/business/corporate-business/2g-scam...
But you can find a lot about this case. The point being Tata or anyone are not absolutely clean.
- 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.
Pretty crappy experience honestly.
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.
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.
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.
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).
Thankfully, hardly anyone of consequence followed suit and the move was widely seen as a disaster.
Why does the customer service suck in general? Do they not invest enough in the technology, service people?
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
Their market caps notwithstanding - Alibaba, Didi Kuaidi and Baidu are not global companies. India already has one of the largest global ad networks outside of Google i.e. InMobi and I believe over the next 20 years, you'll see much more truly global Internet companies started out of India vs. China.
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.
You cannot trust any valuation that comes out of China.
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.
Worth reading to compare and highlights the some of the points in the above article with much more detail..
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.
Not trying to defend flipkart, only sharing my perspective
Consider that Amazon built up the IT capability to build AWS because of the thousands of engineers they had hired that were "just maintaining the website". It's not a simple problem.
2. flipkart.com
3. snapdeal.com
AND
4. shopclues.com
1. amzn.in (90)
2. flipkart.com (80)
3. snapdeal.com (40)
AND
4. shopclues.com (<10)