5th Chapter

SWOC Analysis And Interpretation

SWOT Analysis of Flipkart
Flipkart is a leading Indian E-commerce firm which has been delighting Indian consumers over
the years. It started out as a small online bookstore and now is a billion-dollar firm. In this article,
I will be running through the detailed SWOT analysis of Flipkart and provide in-depth insights
about Flipkart.

We can achieve the most basic form of analysis of a company with a SWOT analysis and here I
aim to take you through the SWOT analysis of Flipkart.

Don’t you want to understand how has Flipkart been so successful? How has it manged to be
among the top 2 E-commerce firms in India since the last decade?

You might also consider getting hands on the SWOT analysis of online shopping in India as an
industry itself and we could benchmark the SWOT analysis of Flipkart vs Amazon.

These two hugely successful companies have kept delivering the goods. Further more, they have
been competing for supremacy in online retail.
Through the SWOT analysis of Flipkart, you would gain a clarity on its strategic decisions
and constant success. Let’s understand the concept of SWOT Analysis initially.
SWOT Analysis of Flipkart
Now let us get to the SWOT analysis of Flipkart.
You will see how the internal and external factors affect Flipkart and its success. You can also
analyse and indicate the strategic improvements that the company can cater to in future.
This section will comprehensively figure out why Flipkart is such a huge success story.

Strengths of Flipkart
Flipkart’s continuous dominance in online retail and is attributable to numerous internal factors.
These refer to the strengths of Flipkart, and here I will be taking you through some of them.

Experienced Foundation
The online retail industry in India was taking its baby steps back in 2007-08.

And at that time, Flipkart’s founders (Bansal brothers) who had just worked at Amazon were
leading the firm. Their technical expertise in online retail industry eased Flipkart’s growth and
prominence.

Even after Amazon’s entry, the competition is still cut throat owing to the great foundations laid
by them. You might also consider getting hands on the SWOT analysis of online shopping in
India as an industry itself and we could benchmark the SWOT analysis of Flipkart vs Amazon.

These two hugely successful companies have kept delivering the goods. Further more, they have
been competing for supremacy in online retail. Through the SWOT analysis of Flipkart, you
would gain a clarity on its strategic decisions and constant success. Let’s understand the
concept of SWOT Analysis initially.
Exceptional Brand Recall
Flipkart enjoys an extensive degree of brand recall through online branding, social media and its
quirky TV advertisements.

Be it those kids acting like adults in those TV ads or the frenzy around ‘Big Billion Day’.

Source - The Big Billion Day Sale - Flipkart

Over the years, Flipkart managed to rope in icons like Alia Bhatt, Ranbir Kapoor, Virat
Kohli etc to connect with its user segments.
Tag lines like ‘Ab Har Wish Hogi Poori’ and “India ka Fashion Capital’ are trending amongst
Indian consumers. E-commerce marketplace Flipkart says it has had a better brand recall among
customers this festive season than its rivals. According to the Bengaluru-based firm, sales on its
platform spiked during rival Amazon’s sale during October 17-20, despite it not running any such
campaign or offering extra discount.

Higher sales were reported in key categories such as smartphones, electronics, fashion and large
appliances. The unexpected jump is making Flipkart course-correct its estimates for the month.
With the company’s second sale planned on October 25-28, it expects another large turnout that
could help boost sales to nearly four times its monthly sales average.
Strategic Acquisitions & Partnerships
Flipkart has consistently been able to establish tie-ups with likes of Myntra, Jabong, Walmart
because it wanted to solidify its position.

Having a separate brand pertaining to fashion and one for digital payments (PhonePe) contributes
greatly to brand equity.

Further, Flipkart has entered many strategic partnerships like Ekart, Chakpak,
Letsbuy, Walmart etc. This enables Flipkart to bolster their logistics, payment gateways and
digital content creation.

Source – Ekart – Logistics Arm of Flipkart

High Volume & Range of Products

Flipkart has a plethora of quality product options to choose from in every category they sell.
Exclusive tie-ups with popular brands like Lifestyle, Apple, Motorola, and Xiaomi in
the past as well as encouraging in-house brands like Citron, Digiflip & MarQ etc have helped
with their large catalogue of products.
 Weaknesses of Flipkart
The online retail giant, Flipkart also faces some internal weaknesses. Let us have a look at some
of them.

Excessive Advertisement Expenses

Flipkart spends as much as 30% of its annual revenues on marketing and advertising, much higher
than HUL. Now, that’s a steep benchmark!
Flipkart relies on heavy discounts, spending crores to attract and retain
customers because it wants higher visibility across mediums.
And, Flipkart reported a loss of Rs 1950 crores in FY2020 even though revenue grew by 32%.
Therefore, ‘Big Billion Day’ has become a trademark yearly sale event for online shoppers. But
excessive spends on ads is not sustainable in the long run.

Source – Flipkart Plus benefits

‘Flipkart Plus’ is nothing more than a simple rewards program for shoppers.
They have failed to build greater impetus around it and branding it for users to spend money to get
that ‘Plus’ subscription.
Lack of Technological Innovation
Flipkart distribution channels and outreach are limited and nowhere comparable to its
top competitors.
The supply chain and logistics for the products delivered to users needs massive up liftment.

The Just-in-Time inventory philosophy needs to be followed as shipping times and lead times to
completing order is too high for Flipkart.

Further, Flipkart has lacked on the R&D aspect of technology - routing users from various
mediums to their website exactly what Alexa does for Amazon.

Rapid Acquisition Spree

Flipkart has been lately looking to up the game by focusing on improving user experience.
It has acquired a host of start-ups like Mech Mocha(social gaming) and AR start-up Scapic.
Given that the company is reportedly posting losses, and competition is heating up, so siphoning
funds on improving user engagement on their platform isn’t exactly first priority.
This rapid acquisition spree might turn out to be damaging for the finances.

Opportunities of Flipkart
While there are many obstacles on the way, there are situations where Flipkart can benefit and
leverage from. Let’s take a look at the Opportunities:

Post-Pandemic Sentiments
Just like COVID has wreaked havoc globally, it also provides great impetus for embracing
‘digital’. As more and more consumers are being aware and switching to online consumption of
services.
You might be ordering your daily essentials though these E-commerce websites. It Is a golden
opportunity for Flipkart to grab on. They should extend its range of offerings focusing on
consumer sentiments and insight.
 Market Development
Owing to the thrust towards digital economy and retail, Flipkart should indulge in new market
development and extend its services.

Flipkart has to be move across borders of India and serve customers from neighbouring
geographies like South-East Asian countries. Because these countries have a high demand for
online retail.
Entering into joint ventures with local players, Flipkart can look to diversify its revenue
from alternate markets.

Delivery Excellence
Order returns, refunds, cancelations, redressal of delivery issues, and fake product deliveries etc
are issues Flipkart should enhance in their ranks.

Source - Optimising the supply chain and logistics for Online Retail

Flipkart should try to reduce the delivery times and increase its operational efficiency for tier 2 &
3 cities because rural dwellers are now surging to online shopping.

Secure and Streamline Payments

Better online secure payments can in still more confidence in people to shop online. India has
one of the highest no of smartphone users in the world.
Flipkart can look to streamline payments for their orders through an in-house payment service
like AmazonPay to include new product lines.
And Flipkart can also look to ride on the wave of ‘Vocal for Local’ sentiments in
India allowing more MSMEs to sell on their platforms.

Threats of Flipkart

In this era of intense competition for survival, there are some threats of Flipkart that it must be
vary of. Let’s take a look at them

Threat of Intense Rivalry

There is no dearth of competitors in the online retail space. Be it international players like
Amazon, eBay, and Alibaba or local ones like Shopclues, Snapdeal, and Paytm etc.
Presence of so many rivals selling similar products immensely reduces revenues.
Two top firms in Amazon & Flipkart are locked in a battle of burning cash, offering festive
sales, and ambitious money infusions from investors. Because they both want to conquer the
Indian online retail market and oust the other.

Source - The annual Festive sales of Amazon and Flipkart at the same time
 Buyer Power & Switching
The online retail market is saturated with Snapdeal, Paytm, Ebay, Myntra Reliance Digital, and
Nyka etc.Customers visibly have lower switching costs; they instantly switch from one
online shopping website to another.
The products are mostly the same apart from a few brands. Hence, ‘standing out’ is tough to say
the least.

Stringent Government Regulations

It is hard to sustain losses and keep doing business if the government regulations keep hindering
the business.In fact, Flipkart was recently investigated related to violations of competition laws in
2020 by CCI(Competition Commission of India).
Indian government also exercises strict control and monitoring of FDI and funds
from foreign investors into Indian firms. This led to many legal issues and operational
problems for Flipkart(now owned by US-based Walmart).
Also, in wake of Indo-China tensions, proliferation of fake goods on online retail sites has
been met with stringent measures.

The proposed policies expect e-commerce companies like Amazon and Flipkart to ensure that
shipments from abroad are channelised through the customs route and have a registered business
entity in the country.
I hope after going through the SWOT Analysis of Flipkart, you now have high clarity on what
Flipkart’s business is all about.I must also recommend you go and read the SWOT analysis of
Amazon.
Why so?It helps you understand the different aspects of the two rivals via the SWOT analysis of
Flipkart vs Amazon.

https://www.superheuristics.com/swot-analysis-of-flipkart-detailed/