Monday, June 4, 2012

Flipkart closes And therein lies the first lesson of e-commerce!

Shutter down...
The suspense is over. Months of speculation over what Flipkart will do with Letsbuy has finally come to a close with, well, the closure of (the website).

From around the 1st of June 2012, gives you details on its home page that it has integrated operations with the largest player in the category. The decision is logical since Flipkart is the bigger brand and, without a doubt, much better at operations than Letsbuy. Two different websites doing pretty much the same thing were always going to be a liability to maintain apart from confusing their operations folks as well! Having given some time for to probably finish pending orders and to integrate backend operations, it was time to close the website.

So, while this happened, I am sure a lot of LB people working on the website would be out searching for new jobs. A friend of mine was working as a tech lead there and has recently moved on to greener (or should I say "safer") pastures. Well, this is part of the integration in the e-commerce space that is far from over with a good number of websites still offering the same kind of products at similar prices. I will leave the integration discussion to a separate post, later.

The Greatest e-Business Lesson

Even if it might appear obvious to a lot of people, I want to explicitly emphasize that this closure of the website is a stark reminder to all of those happy-go-lucky web enthusiasts who think creating a website is the solution to all of world's problems! Believe me, I have been part of many business plan presentation sessions and one is surprised to see the amount of details that are provided over how the website will use the latest Web 2.0 stuff and cloud offerings (and what not) while the "operational" part is left for one slide tucked away between the cloud computing and the number crunching slide! A website is just the front end of the offering. The real deal is the backend, which is what eventually Flipkart integrated and closed down the website. Now, for the folks who believe in the theory that Flipkart bought Letsbuy for other "covert" reasons, I just want to say that this point still holds. The website is not needed after sometime while the backend operations / warehouses of Letsbuy do make sense for Flipkart. As for the covert theory, I touch upon it again towards the end.

Look at what Amazon has done in India!

This appeared in ET in Feb 2012
As if to teach us all about the rules of e-commerce, look at what the big daddy of all online retailers has done for its entry in to India. Amazon has applied for a license for a logistics subsidiary first. It wants to establish the operational backbone in the country first, while testing the Indian consumer  preferences through And when it is ready with its backend, it won't take more than a few days for it to launch its India website. Flipkart is already anticipating Amazon's entry and Letsbuy acquisition was probably part of that readiness. Theory of Rational Expectations suggests that Amazon would also expect a big retaliation from Flipkart when it actually commences operations and would thus plan its own launch with that in mind.That would be an interesting time for e-commerce websites. The smaller ones can probably only hope that Flipkart agrees to buy them to lap up marketshare because Amazon seems ready to go the organic way.

I tried to mess around with Letsbuy redirection but they did a good job!

Let us come back to the home page. Links to various categories on the home page now take you to the corresponding category page on Flipkart. I even tried to play extra smart and checked the old letsbuy link for a TV I recently bought from Letsbuy.To my surprise, it took me to the exact same product on Flipkart. The only disappointing thing was that the price was around INR 2,000 more than what I had bought for on Letsbuy! Something tells me those 2000 bucks were part of the reason why Letsbuy got bought over!

Shouldn't Flipkart also move my order history from Letsbuy to Flipkart?

Now, when they have been so smart about the website redirection, I was wondering if Flipkart can please move the order history also to Flipkart? The message on the home page says that I have to call them to know my order history (between 8AM and 9PM). Now, I have been a customer of both LB and FK, using the same email id. If they can use that to merge my order history now, the combined data would be much more useful for FK to analyse and provide me better "suggested items" than it currently does. That would probably showcase its true intentions also for buying up Letsbuy - was it truly for more market share or was it one of the conspiracy theories that Flipkart took over Letsbuy to prevent a drop in the perceived value of ecom start ups (like itself). Right now, without porting my previous Letsbuy orders over to Flipkart, FK seems to be disregarding the relationship that customers had with Letsbuy, not to mention the loss of cross selling opportunities based on previous purchases.

That is not how a company in the B2C space should treat its customers. With its reputation of outperforming on customer service, I am sure Flipkart can do better than this - right?

1 comment:

  1. Nice writeup MS!

    I totally agree with your point that not migrating order history from LB to FK is a sore point for the consumers in this takeover. I can see technical challenges in doing it but I feel it should have been prioritized in the interest of the consumers, which FK believes is the most important entity for them. My thumbs down on this.

    About amazon entering India, this has been the topic of discussion in the e-commerce lobby for quiet sometime now and its just a question of "when" and not "if" so I am sure all the Indian e-commerce players are planning about the D-day, some by selling product & others by selling (closing) themselves :) Amazon seems to have a strong strategy to enter the market as it has been evident from their actions. Whatever it is, I do not think, in the near future there will be "a" leader in the Indian e-commerce market. There is enough pie to be shared & enjoyed!