I attended Flipkart’s top level Men’s Clothing Seller’s Meet yesterday.
Flipkart’s business has suffered a major hit, sales have come down to as low as 20-30% [in clothing, rest categories are also down, can’t say the exact %]
Some important takeaways:
* 4.2 Lac styles are live on Flipkart but just 10k styles are contributing to 80% of the sales, while the rest is just piling up the junk with very high return rates
(For someone planning to start eCom, you can start with less styles, but ensure that those products are selling good, I am working with an eCom client as a Digital Marketing consultant and I just push those products which are selling good because the ultimate goal is revenue, not even distribution of revenue from all products)
* Return rates are business killers for eCom, because that takes away the margin from the product. Now there are sellers with return rates as high as 35-40%, and there are sellers with return rates as low as 10%. Flipkart makes policies which is applicable to all sellers, to compensate its loss of returns. Flipkart has announced new higher penalty for returns, applicable to all sellers. So because of the junk sellers, the good sellers are also facing the penalty.
* Just 2% top sellers are contributing major revenue for Flipkart, which means they need to clear the junk sellers ASAP, or they will soon follow the path of Snapdeal
(Snapdeal was earlier promoting that they have the highest number of sellers, and that is one of the major reasons why they are out of business now, junk sellers selling junk products. Most of the fashion retailers I met yesterday have stopped selling on Snapdeal)
* eCom business is largely a game of logistics, manage that properly, more chances of winning. There are business models which are doing far far better with the logic ‘Product Free + Only Shipping charges‘
[And few of my friends in this circuit told me about activities of Rakuten in India. Rakuten have always been the last mover in any market they go to. Who would want to leave Indian market?]
Some other insights were discussed, but the most important thing right now is Amazon has just announced more investment of 20,000 crores in Indian market.
Amazon hammering at the right time 😉
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