Flipkart losses are growing fast http://www.livemint.com/Companies/UQAIOMlml7iM6oVufedjOJ/Fli...
I do not think their business model is unique. They are taking investor's money and giving as discount to customers. Important thing to note here is unlike Amazon in US which was genuine innovation for local customers as delivery to home for millions of product who would hate to go out and shop. In India home delivery by local businesses for as little as 2 dollar worth of goods is common for decades before E-commerce boom. Even banks send in some one for paperwork, opening account or just deliver cash at home. So once delivery part is out of equation and heavy discounts are forced out by investors, I am not sure what will be their value proposition.
Flipkart’s valuation markdown
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Re: Flipkart’s valuation markdown
#22Earlier quoted context omitted.
I don't think this is a new concept by any means. It is primarily due to the fact that a large majority of consumers in India might not have the means or the comfort level to put in a credit card. The concept has been around for a long long time. [1] [1] https://en.wikipedia.org/wiki/Mail_order
As mentioned it is a myth. Even within India, the postal dept had this for ages - called 'Value Payable Post' (perhaps going back to colonial days). http://www.indiapost.gov.in/VPPost.aspx Also, seems like mail order for most part still had to depend upon credit cards. See https://en.wikipedia.org/wiki/Card_not_present_transaction The point that I was highlighting is Flipkart showed the way as to how this forgotten s…
Yes?
The idea is not novel, it's been conceived off several times in human history as suggested in this thread alone. So flipkart has no claim to special talent, or high barriers in conceiving of the idea.
Since Amazon also wants to be a market place enabler, and builder of market places themselves, it's quite likely they would see this model being played out in other parts of the world and try it out.
Yes, the number of emails required to sell the idea would be lower with an Indian paragon to point to.
Re: Flipkart’s valuation markdown
#23Flipkart's valuation increased more then 1000x, then went down 27%. There's nothing catastrophic about that. Are journalists really this myopic or just eager for clicks?
Well not catastrophic but I think they will be seriously constrained to raise cash at some frothy, unrealistic valuation.
Re: Flipkart’s valuation markdown
#24Earlier quoted context omitted.
If only there were a way to automatically mark down poorly performing companies based on incoming market data on a daily, nay!, hourly basis...
I don't think it could work. Computers with specifically designed algorithms and extremely fast connection could exploit such a real time market and outperform human traders. Nobody in his right mind would let that happen!
So true.
No, it's best to just stick to what we know.
Re: Flipkart’s valuation markdown
#25Flipkart is copying Amazon in every single way it can, just like Samsung with Apple.
Re: Flipkart’s valuation markdown
#26Flipkart losses are growing fast http://www.livemint.com/Companies/UQAIOMlml7iM6oVufedjOJ/Fli... I do not think their business model is unique. They are taking investor's money and giving as discount to customers. Important thing to note here is unlike Amazon in US which was genuine innovation for local customers as delivery to home for millions of product who would hate to go out and shop. In India home delivery by…
> I am not sure what will be their (Flipkart’s) value proposition.
You are missing out on the whole forest. If you think Amazon was an innovation, solving for ‘hate to go out for shopping’ scenario, then ecommerce in India is 100X of that innovation.
It for simple reason that for vast majority of Indians (non-urban, big and small towns, villages etc.) there is simply no alternative if they want to buy a mobile or a SD card for mobile, or a particular book, or that latest Levis, sneakers, and so on… Heck even in big cities it is a struggle to find things.
The local business that you are mentioning who do home delivery is for day to day things, doesn’t extend beyond ordinary grocery items.
Now why Flipkart still has an advantage? It is simply because it had first mover's advantage. Its brand is well settled in the mind of people, particularly if you consider non urban towns and villages. Those people have simple mind, once a brand settles in their life it is very difficult for another one to replace it. Amazon et al will need to work 10X hard to replace Flipkart from their habits.
Another angle is - mobile.
At the afore mentioned places, the primary device for online shopping is mobile. Now if an app has entered into their device and they have gotten used to it (mind you these folks are not as tech savvy, smart yes but not tech savvy as they never owned a PC before), it becomes very difficult for another online retailer’s app to replace the app that they are used to.
Flipkart still has lot of advantage over Amazon, Snapdeal due to its brand recall (still today if you walk out of city area, online shopping means Flipkart to majority of Indians - almost same as what Xerox is to Photocopy).
That is their value proposition (to investors).
Re: Flipkart’s valuation markdown
#27A swath of private companies are getting huge public markdowns because they took capital from investors who are subsidiaries of publicly traded company companies. This is going to make is much more difficult for this class of investor to access these markets in the future, or they're going to have to pay a premium to do so.
Re: Flipkart’s valuation markdown
#28Earlier quoted context omitted.
Can you elaborate on your comment that Amazon is imitating Flipkart to an extent? Are there specific examples where Amazon is doing this? Is it possible to learn from the Indian market and bring those ideas to a more global audience?
Popular myth is COD (Cash on Delivery) model was pioneered by Flipkart which other e-tailers (Amazon including) adopted. The myth is not without it's merit, Flipkart is perhaps the first one which did it at massive scale and showed how it can reduce the friction when converting a website visitor to a paying customer. Further read on COD http://www.businesstoday.in/magazine/cover-story/cash-on-del...
Myth buster: Innovation and invention.
http://www.businessinsider.com/this-is-the-difference-betwee...
Re: Flipkart’s valuation markdown
#29Flipkart losses are growing fast http://www.livemint.com/Companies/UQAIOMlml7iM6oVufedjOJ/Fli... I do not think their business model is unique. They are taking investor's money and giving as discount to customers. Important thing to note here is unlike Amazon in US which was genuine innovation for local customers as delivery to home for millions of product who would hate to go out and shop. In India home delivery by…
> I am not sure what will be their (Flipkart’s) value proposition. You are missing out on the whole forest. If you think Amazon was an innovation, solving for ‘hate to go out for shopping’ scenario, then ecommerce in India is 100X of that innovation. It for simple reason that for vast majority of Indians (non-urban, big and small towns, villages etc.) there is simply no alternative if they want to buy a mobile or a S…
> Those people have simple mind, once a brand settles in their life it is very difficult for another one to replace it.
This sounds offensive and it is obviously not true in my first hand experience. The main issue is cost effectiveness once merchandise is not heavily discounted. One good example is telecom. There is no brand loyalty even in remote areas as people keep changing already cheap prepaid plans for something cheaper. See this: http://www.gartner.com/newsroom/id/1963915
> At US$40, the ARPU in India is among the lowest in the world and about one-third of that of China
Much less talked advantage in India is extremely cheap labor who deliver merchandise to homes, and that is available to any new competitor. Flipkart/Snapdeal etc are not much different from Indian IT industry which talked a lot about innovation. However it was(is?) mainly about 1/3rd or less cost comparable to west. But for E-comm it is going to be worse as all/most of their customers are in India.
Re: Flipkart’s valuation markdown
#30Earlier quoted context omitted.
Was Cash on Delivery introduced by Flipkart before Amazon in India? If so, I think amazon is 'imitating' flipkart in this area. I see COD on UPS, Fedex in USA but not as popular as COD in India.
eBay.in offered cash on delivery waaay before flipkart (as a matter of fact, the original site Baazee.com which got merged into eBay did it very successfully too)
There were some catalogs, which offered in the earlier days, I remember in 80s and even earlier than that. Its been around long before Interwebs.