October 11, 2014

The Big Billion Day and the Lessons learnt!

Hi Guys,

‘The Big Billion Day’ will remain a most spoken about term in the Indian E Commerce Space. There are lot of chances as to that a case study would be written about it and lot of analysis would be done as to what went wrong and how it could have been done correctly. Flipkart made a blunder with the sale and it not only backfired on them, but boosted Snapdeal and Amazon by a huge magnitude.

Flipkart claims that it achieved the target of a billion dollar sale, but no one can verify their claims from the outside. If it did achieve, then Flipkart grossly miscalculated the potential they had. This is one problem with most of the flash sales. Big Bazaar had the same problems with their sales during their starting stages. Flipkart already experienced backlash with the flash sales of Xiaomi mobile phones and still I’m not sure as to why they headed for a day sales. A week long sales like what Amazon is doing would have been a better deal.

Another question is as to whether Flipkart made an attempt to fool people with false sales and stock outs. If it did try, then it has done nothing but eroded the trust people had on Flipkart. If it was unintentional, then it is a wakeup call for Flipkart. What the day has done is leave a black mark on Flipkart, but I don’t think people would move out soon. But, if people face the same issue a few times, then surely its going to hit the sales of Flipkart.

Out of the whole issue, Snapdeal has been the biggest gainer. With the dramatic advertisement in Newspapers, Snapdeal just ambushed Flipkart’s advertisement. If claims are true, they had 15 times more visit than a normal day. Snapdeal’s problems lie in the backend. Many people are unhappy with their processing of orders. So, for Snapdeal to set itself up, it needs to correct its backend issues before focussing on Ambushing Flipkart and Amazon.

There are lot of questions hovering on internet as to what would be the impact on Flipkart? I feel that this incident in itself would have a very low impact. Particularly it was a good strategy by Flipkart to apologize to its customers. E Commerce is just booming in India and Customer Loyalty is virtually non-existent in this space. If Flipkart can offer better price than other major players, surely people are going to choose Flipkart. But, as I said earlier, if Flipkart has two or three more incidents like this, it is going to take a hit on them.

The final question that arises in my mind is ‘what is the potential market size of E Commerce in India?’ From the way people flocked Flipkart and other E Commerce sites on Monday, it is humungous. With a country with a population of more than a billion and a country that gets more internet connectivity day by day, a country that gets more comfortable with online banking over time and gets comfortable with buying online every passing minute, it is difficult to predict the size. I think Flipkart created too much awareness on the sale beforehand and it boomeranged back.
It has created a small dent on the face of Flipkart. It is up to Flipkart to bring back its glory or fall back to a stage from recovery is difficult.  It is also a great lesson for other E Commerce players in India.

With Government announcing that it will look into trader’s interests, the space becomes more interesting. Lets see how this space develops over the next few months.

Happy Reading!