Recently, Flipkart decided to enter the apparel market by going after the most popular category in Indian efashion – men’s clothing:
How are they going about it? What is their strategy?
Flipkart’s product strategy is very measured. They decided to launch with around 2000 products which is lower than Myntra (5200) and Jabong (7500) - for reference the niche providers eg Zovi, FreeCultr are maintaining less than 1000 products in their virtual stores. What is really interesting is Flipkarts pricing strategy:
They are obviously position their pricing significantly below Myntra and Jabong and going after market share, however…
Is this the right strategy?
The short answer is - It is too early to judge, however we will get the answer to this question very fast-
The answer is yes if:
…they establish themselves gradually as a brand and go on the private label road which will allow them to increase margin
The answer is no if:
- They try to be multi-brand store the margins will kill them
- They quickly introduce additional categories without fully understanding the market and continue not to care about margins (superficially low price compared to Myntra and Jabong outlined above)
What do they need to do if they would like to be profitable?
We just want to make clear that this is a very different question to “what they need to do if they are going after market share and trying to get more funding/sell themselves/go for an IPO”
- Build market share with focus on multiband offering
- Test the viability of the model
- Establish themselves as a leader in this segment
- Build profit with targeted private label and brand recall to drive organic traffic
- Gradually roll out additional categoriesWomen
IntelligenceNODE is a technology backed pricing strategy and business intelligence consulting firm. We recognize problems prevalent within the e-retail ecosystem, and have created trust behind technology to help make e-commerce simpler and more rewarding. What we call providing immunity to complexity is actually immunity to non-profitability. By using sophisticated algorithms and our proprietary online decision support system, we deliver holistic business intelligence dashboards from an elevated perspective, and then anchor them in a solid strategy through actionable consulting.