If there was a list of top Indian online companies, then Flipkart will surely be on top. There are very few Indian companies worth more then 2 billion dollars and Flipkart as on date is worth more then 11 billion dollars. The company was started in 2007 by the brothers Sachin and Binny bansal who took it to staggering heights. This article presents the SWOT analysis of Flipkart.
Strengths in the SWOT analysis of Flipkart
- India’s Largest E-commerce Retailer: Flipkart is the India’s largest E-commerce company & had sold GMV (gross merchandising value) of $1 billion till now.
- Experienced founders: The Founders of Flipkart, Sachin & Binny bansal are Ex-Amazon employees. Having prior experience in the E-commerce industry helped the founders to work strategically and differentiate their business in a highly competitive market.
- Acquisition: With its series of acquisitions like Letsbuy.co,, chakpak.com, weread.com, Mine360 & the recent one Myntra in 2014 has helped the company to expand in the E-commerce space & used the capabilities and existing resources of acquired companies.
- High Brand recall: Flipkart has established itself as a renowned E-commerce company in India through TV ads, online branding and through its presence on social media. Brand activities like the “Big billion day” have really increased the brand recall of the company.
- Own Payment gateway & Logistic arm: Having its own Logistics arm E-kart & payment gateway Payzippy has helped the company to control its Expenses. Thereby passing the benefits to the end customers.
- Exclusive & broad range of products: From having Exclusive rights to launch some products like MotoG MotoX, Xiaomi Mi3 as well as personal designers segments in garments category, has helped the company to differentiate and localize its offerings.
Weaknesses in the SWOT analysis of Flipkart
- Limited Distribution channel reach: Although its logistics arm has kept cost’s low, the reach has been affected which is a weakness for Flipkart. Due to use of outsourcing, Global giants like Amazon & eBay can deliver the product anywhere in the country. However, Flipkart is still struggling in this field.
- Cost of Acquisition: Due to stiff competition in the market & low customer retention, the cost of Acquisition is high because Flipkart acquires a lot of customers through online advertising. As per Flipkart data, the company spends R.s 400/- on acquiring a new customer on an average.
- Power in the hand of buyers: Since this industry is flooded with many players, buyers have a lot of options to choose. Switching costs are also less for customers since they can easily switch a service from one online retail company to another. Same products will be displayed in several online retail websites. Product differentiation is almost absent and the fight then begins on the basis of price only.
Opportunities in the SWOT analysis of Flipkart
- Expansion of business: By targeting other emerging markets company can increase their revenues as well as it can have Economies of scale.
- Expanding their Product categories: This will increase their customer base & at the same time will reduce the cost of acquisition and customer switch.
- Changing mentality of Indian customers: With increasing numbers of customers getting comfortable with online shopping & increase in numbers of Internet users in India, there is huge potential in this Industry.
- Supply chain: By optimizing their supply chain they can compete with the other players & can manage the loosing sales on account of not making the product available due to delivery constraints.
- Establishing in other developing economies: Like Amazon, Flipkart can slowly start expanding out of India and establish operations in other countries as well which will help improve revenues.
Threats in the SWOT analysis of Flipkart
- Competition: Stiff competition from the global players like Amazon, eBay as well as local player like Snapdeal, Tolexo and Shopclues who are continuously trying to eat each other’s market share.
- Government regulations on the issues related to FDI in multi branding retail has been a big hurdle in the success of the E-commerce industry in India.