Recently a friend of mine wanted to buy a television online. The choice was rather easy, to go with Flipkart or Amazon. The timing of the purchase coincided with the sale on both the sites, offering 10% cash back on select credit cards. While he had the card that would have allowed him to get a discount on Flipkart, he had to order the product from Amazon instead for a higher price. The reason was simple. Flipkart wouldn’t ship to Shimla, a state capital.
This was not my first experience with Flipkart not having shipping facility for a product to a major city. Oh, and in case you think Shimla doesn’t qualify to be a major city, I’ve seen listing on the website that wouldn’t ship to Gurgaon, Chandigarh or even Lucknow. Jump over to Amazon, and they’ll ship to all of these cities along with multiple tier-3 cities too. And this is doing Flipkart more harm than any discounts could make up for.
As the young population in smaller cities grow accustomed to ordering products online, they will most likely lead the growth in e-commerce sales. Although Flipkart enjoys a comfortable lead over its rivals for now, the gap is narrowing day by day. Another development obvious in the market is that more brands are choosing to go Amazon exclusive. This should ring the alarm bells already as Flipakrt has lost Lenovo/Motorola as an exclusive partner and now even the new Samsung phones are exclusively available on Amazon. The problem? Well, we don’t know, but we’re certain these brands would prefer to reach a wider audience and Amazon’s delivery network is simply better at it. Barring WS Retail, only select sellers on Flipkart ship to tier 2 cities. For a company that calls itself India’s leading online retailer, this simply doesn’t cut it.
Flipkart needs to ensure that it covers more cities in the country not just for major sellers, but for smaller ones too. The more it delays, the more shoppers are going to find Amazon as an attractive alternative. It also risks losing key brands in other categories such as televisions, laptops and other consumer electronics. These not only drive traffic but also have an effect on the brand perception. If Flipkart doesn’t even have the full catalog of products, I’d obviously go to a site that has it, which in this case is Amazon.
Time is running out for the US$10 billion company and the management needs to awake to the ground reality sooner than later. A wider reach would any day be a better strategy for growth instead of deep discounting.