Flipkart had a lot at stake this festive season. After being in denial for a long time about the company’s dismal performance, managers including the founders were ready to address the real situation.
In a meeting held in August, Sachin Bansal said,
“Some of our targets have been missed and everyone, including the top management has paid the price.”
That’s the time when Binny Bansal took over the reins of Flipkart’s CEO position. Company insiders also revealed that there’s immense pressure on the employees to make Big Billion Days 2016 a grand success and defeat close rival Amazon India.
The high target pressure worked as the etailer managed to turn things around by hosting the most successful BBD edition ever.
The magic formula
Flipkart’s sales grew 10X during its annual sale with the total figure amounting to Rs. 3,000 crore and sold 15.5 million units. According to the Indian etailer, the strategies that enabled them to multiply sales are:
- Low-budget marketing campaign (used tried-and-tested and much loved ‘kids as adults’ ads) unlike Amazon and Snapdeal that splurged crores on advertising
- Innovative digital treasure hunt – Flipkart 360-degree Big Billion Hunt
- Exclusive tie-ups with electronics and apparel brands
“This year’s BBD was very important for us, it was the third version, and compared to previous years, it’s far more competitive and other people are closer to us. So, it was important that in this year’s event, we re-stamp our authority as the No. 1 e-commerce player in India. And from that perspective, the fact that we’ve got the maximum attention and traffic for our event at much lesser budgets than what our competitors had is the standout outcome for us. We had half the budget and much more business—that is something all of us are happy about,” said Flipkart’s CMO Samardeep Subandh.
Missed opportunity for Amazon India?
According to ASSOCHAM, online consumer demand hiked up by 40% compared to last year’s festive season. Therefore, the opportunity was/is huge for Indian ecommerce players. While Flipkart hit the jackpot with BBD, Amazon is a little behind.
The American etailer probably underestimated Flipkart’s sales strategy, which is why Amazon ended up spending more and earning less than its rival. We aren’t suggesting that Amazon’s sales figure isn’t high. The company broke all sorts of records during its Great Indian Festival. But it could have been much better, considering the fact that Flipkart was struggling on various fronts and Amazon has no dearth of funds.
Although, the head-honchos of Amazon believe they are ahead of its rivals in terms of expanding customer base and consistent high-growth trajectory.
Amit Agarwal VP and Country Manager at Amazon India asserted,
“The purpose of these kind of sale events is not to sell a particular kind of product in large quantities. What is important in these sale events is to expand your customer base so that when they come to you every day subsequent to the sale you’ll keep growing.”
“We’ve grown 135%, on average, year-over-year in every quarter (this calendar year). That compares with flat or negative growth for the overall market and for other players. And we continued that momentum (by recording three times sales growth in the sale week). It’s exciting that in a little over three years, we have done and we’ve led the pack for what e-commerce should be, what others in 10 years and with multiple acquisitions have not come close to doing. I’ll take this any day.”