Flipkart

Sector: E-commerce Country of operation: India Key product categories: Apparel, consumer electronics and fashion Summary Founded in 2007 and headquartered in Bangalore, Flipkart is one of India’s leading e-commerce players, with particular dominance in apparel, cell phones, consumer electronics and large appliances. The company operates primarily as a business-to-customer (B2C) marketplace. In September 2020, it launched its business-to-business (B2B) marketplace, Flipkart Wholesale, which is designed to connect local manufacturers with retailers. Flipkart is known for its innovations in customer service, including easy return services, cash on delivery payment options and its “No Cost EMI” initiative, whereby consumers can pay for a product or service in affordable monthly installments with zero interest. Company Analysis Coresight Research insight: We expect Flipkart to benefit from the growing e-commerce market in India and its flourishing social commerce segment. According to the Indian Brand Equity Foundation, which sits within the Ministry of Commerce and Industry, the country’s e-commerce market is set to grow to $200 billion by 2026 from $38.5 billion in 2017. Flipkart projects that the number of online shoppers in India will jump from 100–110 million in 2020 to 300–350 million in 2025, providing a significant target consumer base for the company. Flipkart is investing in its consumer shopping experience to attract sales as consumers increasingly shift spending online in India. To ensure seamless online shopping processes, the company is investing in was augmented reality (AR) technology, as evidenced in its acquisition of AR and 3D experience platform Scapic on November 17, 2020.

Tailwinds	Headwinds
The number of online shoppers in India is increasing. Flipkart’s parent company, Walmart, has the potential to bring more investments and a greater market presence. Flipkart’s technological innovations drive engagement and efficiency.	There is heightened competition from other e-commerce platforms in India, such as Amazon and Snapdeal. New entrants in e-commerce, such as India’s largest retailer, Reliance Retail, pose significant competition for market share and sales. The cost of enhancing capabilities to deliver value for sellers and consumers is high.

  Strategy We identify three key aspects of Flipkart’s business strategy to achieve growth, which we detail below: 1. Expand and consolidate categories

• Extend the category range into fashion. Flipkart made its first move into this category through its partnership with Max Fashion in September 2020. Subsequently, in October, it acquired a 7.8% stake in Aditya Birla Fashion and Retail Ltd. to push further into the apparel category.
• Move into the grocery business. Flipkart initiated this move through investment in fresh produce supply chain startup Ninjacart for $30 million in October 2020.

2. Upgrade integration with small businesses

• Support startups. In August 2020, Flipkart launched startup accelerator program Flipkart Leap to boost Flipkart’s leadership in the startup industry.

3. Improve the customer experience

• Continually assess the safety and quality of products to rate more companies as “Flipkart Assured”.
• Expand delivery services to more areas in India by merging resources in logistics and warehousing, and investing and partnering with logistics firms.
• Use new technologies, such as AR, to drive innovation in customer experiences.

Company Development

Date	Development
March 4, 2021	Flipkart introduces voice search on its platform so customers can discover products using voice commands in Hindi and English—or a blend of both.
February 25, 2021	Flipkart partners with vehicle manufacturers Hero Electric, Mahindra Electric and Piaggio, announcing plans to deploy more than 25,000 electric vehicles by 2030, for its last-mile delivery fleet across India.
January 11, 2021	Flipkart partners with NITI Aayog, a Government of India policy think tank, to launch the revamped Women Entrepreneurship Platform, a unified access portal to bring together women from different parts of India to realize their entrepreneurial aspirations.
December 7, 2020	Flipkart announces plans to raise $10 billion through its IPO in the US.
December 3, 2020	Flipkart partially spins off digital payment platform PhonePe, which will raise $700 million in primary capital after the divestiture.
November 17, 2020	Flipkart acquires a 100% stake in AR company Scapic to enhance its shopping experience capabilities.
November 3, 2020	Flipkart acquires the intellectual property (IP) of gaming startup Mech Mocha for an undisclosed sum, intended to boost user engagement on Flipkart’s GameZone platform.
October 23, 2020	Flipkart acquires a 7.8% stake in Aditya Birla Fashion and Retail Ltd., a fashion and lifestyle company in India with over 3,000 stores, to make a further push into the apparel category.
October 12, 2020	Flipkart announces its second round of investment, with its parent company Walmart, in fresh produce supply chain startup Ninjacart for $30 million.
September 23, 2020	Flipkart partners with Max Fashion, a brand under the banner of Dubai-based Landmark Group, to expand its fashion category.

Management Team

• Kalyan Krishnamurthy—CEO
• Sanjay Baweja—CFO
• Mayur Datar—Chief Data Scientist
• Daniel De la Garza—Chief Ethics and Compliance Officer

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Source: Company reports/S&P Capital IQ