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Flipkart - Big billion day case study

Research · June 2015

DOI: 10.13140/RG.2.1.1005.1686

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 SONA SCHOOL OF MANAGEMENT
A unit of Sona College of Technology, Salem.

Has Flipkart flipped its cart?

Flipkart, an ecommerce company started by Sachin Bansal and Binny Bansal in the year 2007 to cater
Indian consumers needs. Founders were alumni of IIT Delhi and worked for Amazon.com before
starting Flipkart. They have invested Rs.4 lakh to start the website; out of that they spent Rs. 2 lakh
to buy computers and furniture. Even though the company is headquartered in Bangalore, India it is
legally registered in Singapore. It started to sell books online initially and now it is selling 15 million
products 70+ categories on par with Amazon.in. Flipkart invites sellers to network with them to sell
products to the end consumers, here it just acts as market place for consumers and sellers.

People have perceived risk associated with online purchase, Flipkart marketing strategies reduced
people’s perceived risk and made millions of people to buy products. Unique strategies adopted by
them to capture Indian consumers are cash on delivery, 30 days replacement policy and easy
monthly instalment. The website now has 2.2 crore registered users, 40 lakh daily page visits and 50
lakh shipment every month. When Sachin Bansal shared his story to Yourstory.com, he mentioned
about the marketing strategies employed during the initial days of Flipkart.

“We used to stand outside Gangaram Book Stores on Church Street and hand over Flipkart
bookmarks to the people coming out of the shop. In order to make sure that our targeting was right,
we would give bookmarks to only those who were coming out with books in hands; the people who
have made purchases”. – Sachin Bansal.

Flipkart first sale happened when VVK Chandra from Andhra Pradesh bought a book titled “Leaving
Microsoft to Change the World”. Word of mouth marketing was the primary support for the e-tailer
during the initial days and even now it supports the organization as pillar. Major marketing plans
made by Flipkart include Flipkart students, Flipkart First Service and Flipkart mobile app in the recent
days. Students who register with their ID card get Rs.150 off on purchases made over Rs.750 and
they get 50% off on Flipkart First service. After getting their supply chain network strengthened by
establishing Ekartlogistics founders made a move by introducing Flipkart first service to support
regular buyers. If the customer pay Rs.500 per annum they get free shipping for the order without
any minimal purchase price, discounted same day delivery (just Rs.70), free in a day delivery, and
access and priority to all the shopping events.

Flipkart first service is similar to Amazon prime premium subscription service. Marketing strategies
employed ensured customer visiting the website regularly and make a purchase. By acquisition of
many other online sites like WeRead, Mime360, Chakpak.com, Letsbuy.com, and Myntra.com takes
the company to greater heights in the ecommerce industry in India. The website is able to sell 20
products per minute and it’s aiming to touch INR 50 billion revenue by 2015.

Flipkart website gets huge traffic every day, according to Alexa.com reports Flipkart.com is at 91 st
rank globally and 6th rank in India. Looking at the demographic factors, males are mostly visiting the
sites rather than females. People access the sites from schools, home and work place out of which
work places tops in the list. Flipkart was loved by people for its simplicity of the websites, easy

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Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is
meant only for educational purpose.
payment process, excellent delivery, discounts, offers and promotion. As market leaders in India
Flipkart enjoyed its journey in the last seven years with 10000 employees.

Day that made a difference

On October 6th, 2014 Flipkart went for a biggest deal in the Indian history it proudly called it as
“Bigbillionday”. On the big billion day, Flipkart told it will sell multiple items at Rs.1, 30% off on smart
phones, laptops at Rs.15000 starting price, fashion and perfumes at 50% off, toys at 50% off, deals
and lucky draws every hour. Flipkart sold Nokia Lumia 525 at 90% discount, Kodak cameras at just
Rs.1195, Galaxy tab 2 was just sold at Rs.1390 and Karbonn Mobile A5i was sold at Rs.99. Sachin and
Binny were working round the clock and 9000 plus employees were working for 12 hours and more
to achieve targets.

Dates for the sale was not fixed randomly, it was fixed based on the history of Flipkart. October 6 –
10th was chosen because Sachin and Binny started flipkart from a apartment numbered 610 seven
years back. The big billion day was promoted through social medias, emails, and tv ads which
grabbed attention of millions of people across India. When the sale was opened on 6th October 2014
by 8 am, many things happened.

On that day the site got one billion hits and was able to achieve its target of USD 100 million in just
10 hours. Sachin and Binny Bansal were able to achieve what they aimed for.

Despite the success, there were odd things happened on that day. Missionsharingknowledge.com
published a post titled “Flipkart’s The Big Billion Day – a pricing SCAM?” which showed jacked up
prices for many products just few days before the Bigbillion day. [See Exhibit No 1]

Customers were eager to get the offer but they were not able to grab one as they expected. Since
the expectation of customers was boosted beyond the limit by promotions it backfired on Flipkart.
Flipkart made enough arrangement to support “n” number of visitors by deploying 5000 servers but
the servers crashed and people were not able to order products [See Exhibit 2]. People started to
mock Flipkart in twitter and face book. Flipkart’s brand name got tarnished on that day since the
word of mouth was negative. [See Exhibit 3 and 3.1]

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Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is
meant only for educational purpose.
People also claimed that most of the products went out of stock in few minutes; also products were
cancelled by Flipkart itself [See Exhibit 4]. Even customers were annoyed by highly inflated prices
and miscalculated price discounts [See Exhibit 4 and 4.1]. Adding to the worries newspapers and
bloggers wrote about Flipkart’s performance on October 6th. Indian express plainly told - ‘Big Billion
Day’ sale gets Flipkart millions of unhappy customers.

Flipkart didn’t face problems only with customers; they also faced problems from the competitors.
Snapdeal.com added worries to Flipkart by putting an advertisement mocking the bigbillionday. The
advertisement said “For others, it’s a big day. For us, Today is no different” – Best deal guaranteed.
Every day. This advertisement appeared in the front page of Times of India and at the back page
Flipkart advertisement was published [Exhibit 5]. Amazon made a tricky move they bought
bigbillionday.com domain, if a customer gets into that domain it will automatically redirects the
customers to amazon.in. Customers even compared the offer prices with other e-tailers and found
they are offering products cheaper than the offer prices of Flipkart. These information went viral in
twitter and face book. Twitter got lot of tweet with #bigbillionday #checksnapdealtoday. People
started to chide flipkart in the social media and they said it’s not Flipkart it’s actually fakekart,
flopkart, foolskart and so on.

Even customers were told that they will not get products delivered in Chennai and Madurai. Tamil
Nadu customers were not included in the lucky draw. Customers from Tamil Nadu said “We do even
buy”. Flipkart reverted back saying the Tamil Nadu government don’t accept lucky draws as per their
regulations. Many customers reported the offer was continuously changing even during the
purchase [See Exhibit 5.1].

Bigbillionday promotion helped Flipkart to achieve its monetary target yet it lost its sheen in terms
of brand loyalty. Very next day, Sachin and Binny Bansal wrote apology letter to customers and
employees. The letter to customers talked about the price issues, technical glitches, out of stock
issue and website issue. To the employees stating they take the entire responsibility for what has
happened on the bigbillionday [See Exhibit No 6]. Apology message from Flipkart aggravated the
anger of people, in just 39 minutes after their apology message in Face book page got 266 comments
and most of them were against Flipkart.

In spite of all odds Flipkart was able to achieve its target and many people even wrote good review
for Flipkart bigbillionday purchase.

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Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is
meant only for educational purpose.
Is it a scam?

Exhibit No 1.

Source: http://missionsharingknowledge.com/flipkarts-the-big-billion-day-a-pricing-scam/

Author: Hrish Thota

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Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is
meant only for educational purpose.
Server Failure

Exhibit 2:

Twitter Comments

Exhibit 3:

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Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is
meant only for educational purpose.
 COMMENTS RECEIVED FOR FLIPKART BIGBILLIONDAY IN FACEBOOK

Exhibit 3.1:

Rohith Garnepudi

Flipkart Flipkart
Yes papa
Selling cheaper
Yes papa
Telling lies
No papa
Where are the offers
Hahaha...

Girish Shenoy Dear SAchin and Binny of flipkart.com. believe me.. I have decided not to shop in flipkart
anymore.. I was an occasional shopper on flipkart.com but since this foolish incident.. I have decided not to even
open your site anymore.

Big Billion Day:

Exhibit 4:

Order cancelled by Flipkart not by the customer.

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Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is
meant only for educational purpose.
Take a look at the device's original price. The price mentioned is Rs 49,999 (£507), and the device is
claimed to be offered for a price of Rs 2,299 (£23) which represents a near 95% discount which
seems really unrealistic.

Source: http://www.ibtimes.co.uk/analysing-deal-behind-flipkarts-big-billion-day-sale-1468884

Source: http://www.ibtimes.co.uk/analysing-deal-behind-flipkarts-big-billion-day-sale-1468884

Exhibit 4.1

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Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is
meant only for educational purpose.
 Source: http://tech.firstpost.com/news-analysis/flopkart-twitter-mocks-flipkarts-big-billion-day-
festive-sale-236751.html

Advertisement that created demand:

Exhibit 5.

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Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is
meant only for educational purpose.
Exhibit 5.1:

Apology after Misery

Exhibit 6: Originally posted in economicstimes.com

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Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is
meant only for educational purpose.
 Reference sites:-

1]http://www.business-standard.com/article/companies/amazon-builds-india-business-quietly-
114040300984_1.html

2]http://www.businessinsider.in/Flipkarts-MegaSale-Faces-Backlash-Snapdeal-Gains-
Edge/articleshow/44499866.cms

3]http://gadgets.ndtv.com/internet/news/flipkart-students-scheme-launched-with-exclusive-
benefits-for-students-555530

4]https://novoed.com/venture1-2014-2/reports/256434

5]http://economictimes.indiatimes.com/industry/services/retail/flipkart-accepts-shoddy-
performance-apologises-for-glitches/articleshow/44630127.cms

6] http://www.ibtimes.co.uk/analysing-deal-behind-flipkarts-big-billion-day-sale-1468884

7] http://post.jagran.com/flipkart-apologises-for-glitches-during-big-billion-day-sale-1412696691

8) Facebook page of Flipkart.com

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Case prepared by Mr.K.Balachandar, Assistant Professor, Sona School of Management. The case is
meant only for educational purpose.

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