#FLOPKART

Flipkart was planning the greatest shopping day for India 2-3 months prior to the 6^th of October, 2014, taking a leaf from the billion dollar sales of Alibaba.com (Chinese e-commerce giant). Understanding their plans Snapdeal also got themselves buckled up with a plan of their own, to attract the dejected from Flipkart. They named this day “big billion day” with the motive of bringing the billion dollar population of India for one purpose under one website. Their estimation team and think tank had predicted a customer inflow 20 times of the normal weekends. 5000 servers were deployed to handle the expected traffic. Many retailers were talked and asked to participate in this festival, to help them make the deals as juicier as possible. Looking at the returns Flipkart offered them, they were more than glad to be a part of it. The reason they (Sachin and Binny) say they chose this day was because they stayed in a flat with number 610 when they came up with the Flipkart idea back in 2007.

Everything was in place (at least it looked like that to them) and the day was about to begin with all the major periodicals carrying their advertisements of the sale. The start proved to be so heavy that unheard offers were getting lost in the sight of a click. Some of the offers were as less as 1 rupee for a hand blender, 2 TB portable Hard Drive for just 600 rupees and Samsung Tab 2 going at rates of 1399 Rupees. But the real cause of worry was they apparently weren’t prepared for the tsunami of customers that engulfed in. As they were ordering, many of them were redirected to “product not available” page. This in turn resulted in numerous dissatisfied customers bad mouthing about the website across the internet. Flipkart was compared to the similar kind of service provider, IRCTC, where one moment you will be booking the ticket and another you will be cordially shown the way out since the tickets are not available any more. They had started out the day to discuss about the flash sales with #bigbillionday, which just after few hours turned into #fraudkart and #flopkart. The primary reasons being the price changing like the roller coaster rides, out-of-stock issues, cancellations and server errors. The company could have easily arranged for a better management of the website, like not having more than 100 people viewing the same item, and only allowing one to click the order button with prioritization on the basis of customer history, to resolve cancellations and out of stock issues. Server errors are a bit understandable considering no one could have predicted the hits let alone a start-up e-commerce.

The company though had achieved their targets of $100 million (~615 crore rupees) in a matter of 10 hours, with over 1 billion hits on their website and sales from 1.5 million customers, but there were 15 million customers crying foul for feeling cheated by their go to website. This helped websites like Snapdeal and Amazon.com to cash in and capitalise on the situation. Even lesser known websites like shopclues gained much attention on that day. Snapdeal officially announced that they had earned 1 crore rupees every minute in sales during that day, which amounts to the figures also put out by Flipkart, though they didn’t reveal it in exact numbers. Amazon garnered a tremendous attention without advertising a damn.

The very next day they were all over the news for all the right as well as wrong reasons. From the many, one of the few who really voiced out his opinion against their strategy was Kishor Biyani of Future Group. Obviously he would: For the fiscal ended 2014, India’s first organised retailer, Future Retail, had a market cap of Rs 2,100 crore, while e-tailer Flipkart was valued at around R12,000 crore. After a series of funding, the most recent one being a whopping $1 billion, Flipkart is today valued at around R43,000 crore  ($7 billion), while Future Retail stands at R2,886 crore. If this does not tell the story of the success of online retail in India, what does?

Enforcement Directorate (law enforcement agency and economic intelligence agency) was to look into the matter, but just recently (20 October) Minister Nirmala Sitharaman said there was no inquiry into complaints against e-commerce giant Flipkart of predatory pricing of goods and unfair trade practices during its recent 'Big Billion Day' sale. The dust has settled, and it has majorly been a win-win situation for the e-commerce of India. Snapdeal has attracted an investment of $627 million from SoftBank, Japan looking at its growth trajectory. Amazon has seen a 30% rise in sales since that day and an overall growth of e-commerce has touched the 48% mark.

(Flipkart Apology letter to all registered users: http://blog.flipkart.com/apologies-from-flipkart/)

(Statistics collected from various reliable sources. Conclusions drawn and judgments are purely my own personal point of view)