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W T F-lipkart ???

By Puneet Sharma on 23 Comments / 4413 views

LONG BACK

Looking for a book on internet I stumbled upon a website called flipkart.com.

It was a book store and sold books at prices far better than the local book depots. It was a hit for me, with all the books that I wanted available and at unmatched price.

Back then it looked like this 

[Image source – wayback machine]

It was growing fast and I believe it started making profits too.

It then got VC funded…and funded again
And one day I received an email from flipkart saying – “We also sell mobile phones now” … then ” electronics ” … and then “home appliances” … “CDs, DVDs, Cameras, Laptops, Fridge” and so on…

NOW

I see Flipkart on TV, Newspaper, Internet and every where. 

It is hugely VC funded – and every few days I receive email from them saying – 

“We now sell music at Rs.6 per song (No home delivery on that one 😛)”

“We sell pen, pencil, eraser” … “Bags, Belts & Luggage”… “Razors, Blades & After Shave ” … and a hell lot more.

Its product portfolio is growing very fast but everyone says (I’ve read) it is now making big losses.

With the current growth rate I suppose flipkart’s home page will pretty  soon look like this – 

[Image – Imaginary using MS Paint & Google]

And I will receive an email saying –

“We now sell Sambhar Masala, Tomatoes, Milk & Men’s Chaddhi”

I am confused :-/ 

Does selling everything makes Flipkart(online store) profitable ??

(What do you think ??)
 

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23 Comments

  1. I think (as has been mentioned in other posts )  all the e-com sites are trying to competing with each other and waiting for the other guy to bleed to death. Its a race against time .. the e.com which has more money and clout will try out the patience of the other players – before they emerge as winners. They might not win because of their USP but bcoz the ther guys gave up !!!

  2. Is it another Bubble in the making ??

  3. Flipkart is basically a Amazon in the making and I will not be surprised if it start to sell fresh vegetable, milk or papad. Amazon does so it will do, provided it survives for long.           

  4. Flipkart is an online Hypermarket, so don’t be surprised if you see vegetables, milk, etc on it. Yes even I share the same concern of acquiring market share with building losses. But as I understand their volumes are not huge enough to cover their fixed cost, also products like books are not high margin business, so what next. SELL all under the umbrella, some will provide margins, some volume and as they grow, fixed cost shall not be a problem any more, they may start making profit. Until someone comes too close to their service level, they may reach numero uno position. The only close competitor in terms of range of products with price as competitive is only ebay, but there responsibility of serving is on individual sellers whom you don’t know. Wait for Amazon to enter, the whole ball game would change from there on.. 

  5. People are selling Buffaloes on ebay. If they can handle it, they should go ahead.

  6. boss, underwear is a great business! i sold socks for 9 years

  7. So far they have been doing a great job.If they are able to manage the cash burn part,I think they will come thru and I have no doubt its Amazon in the making.Amazon became profitable after ten years.They are the market leaders and most important they have the customers TRUST.

  9. Great sense of humor u’ve got.. Selling everything doesn’t makes an online store profitable.. I think they still are in learning stage & researching what will work & what will not burning VC’s money, their only goal now is to setup a huge consumer base & increase their topline to have multiple digit balance sheet. I feel the ecommerce in India will take a good shape in coming days with giving opportunities to everyone having a clean setup. We are also coming up with a niche ecommerce portal catering Kitchen appliances on http://www.Kitchen18.com

  10. Lingerie is a very good business, there is a space for Online only lingerie brand men+women both, you should start one 🙂 I had a similar plan but the fresh investment would be big for me so started ecommercing the existing business what I have. If u start then I can handle your backend admin & fulfillment of orders which I am experienced at.

  11. i think somewhere in all of this mayhem to go online and sell, there is a lack of demand analysis and that too in the Indian context. If it works in the US, it is not destined to work in India. Do consumers REALLY need to buy a toaster online ? Or even a shirt ? The traditional consumer behavior where if ‘I need something I’ll go to the shop and buy it’ will always work in contrast to ‘I don’t need it but you’re shoving it in my face, so I may just buy one’. For a while this gimmickry of sorts may attract people but over a course of time, people tend to lose interest in these ‘in your face’ style sites. Pepperfry goes one step further by offering me discounts to compel me to buy. Thats desperation !

  12. I agree with you Sachin.. After a stressed-out week, if you were to tell your wife that we aren’t going out of the House anywhere for the weekend and instead we will watch Movies Online, do Shopping Online & buy Grocery Online, she will leave you in OFFLINE.. :))

  13. Ha Ha Ha, Agreed !

  14. Alok,

    So as per ur business consideration, http://www.menzkart.com going to be Hit now.I know the guy who running menzkart.com and I hope he will become a millionaire soon . 🙂

  15. I think someone should come up with ecomkart.com, a place where people sell ecommerce businesses. Atleast, They’ll never have inventory problems.

  16. Ha Ha Ha !!!!  that’s an interesting idea 😛

  17. I would say that’s called enticement and trust me people fall for it and it works for the most part.

  18. last time, i heard the flipkart guy saying everything except vegetables is a go for them. basically its good to expand given that they have a good user base to cash in on and today everyone is coming online, so it make a lot of sense.

  19. I agree…selling everything under the sun somehow dilutes the main key focus. Before books means Flipkart…now I am not too sure what do I visit Flipkart for?

    Seeing all this burning-cash for ecommerce sites, I continue to hear that Flipkart been on a hiring spree..even from premium places like IIM…wonder is there is a method in all these madness?

    Amazon took years to be where they are…and the economy they function is different, the culture they work is different…blindly copying them is a sure-shot way to go downhill! 

    My few rupees of thoughts! 🙂

    P.S. – I have bought a toaster and other small home appliances from Flipkart! Great price, super convenient! 🙂

  20. Snehil Khanor *liked* your comment 😛

  21. Interesting discussion going on..
    Although I’m not a very big fan of Flipkart (mostly bcoz how they handled Letsbuy acquisition.. so they’ll always be evil in my and other 300 colleague’s opinion) but in this issue I’ld actually support FK.

    See although they are shipping 30K orders a day.. but 65% of it are books.. with negligible margins.. so to become profitable they had to expand in more profitable verticals..

    FK has managed to establishe a strong backend.. created a good platform(their website) to sell stuff.. now they can just focus on selling and to increase volumes to finally become profitable.. not only on per transaction but also operationally..

    I wont be surprised if they start selling grocery too.. Infact that may convince me to make my first purchase from them. Currently I use MyGrahak.com for grocery shopping.. although their backend is strong (because they are part of 6TEN group) but their website sucks like BIGTIME! It actually gives you a feel of buying stuff from the roadside instead of feel of buying stuff from Air-conditioned grocery marts..

  22. In My Opinion Yes, It makes them Profitable and saves the consumer’s time. I think flipkart.com is making decent profits on books or atleast having a breakeven. Compare the Prices of Books on http://www.thisyathat.com and You see flipkart prices are damn 30-40 % high than homeshop18. 

    And Also VC’s are pouring money to make it amazon of India and not let it lose its identity like many others. They are also ensuring that it does not only cater phuktias like many other sites.

    I see the money is used to develop the platform, systems and similar stuff and let consumers buy every item from flipkart.com

  23. 😉

    its extremely high margin business actually!!! and with recurrent and inelastic demand pattern…

    after mobile accessories, laptops etc, i guess might venture out to these as well on my ebay shop!

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