Flipkart.com is one of India's best known online retailers. Founded in
2007, with the ambitious dream of becoming India's Amazon.com,
Flipkart.com started out selling books and quickly expanded its product
portfolio to include laptops, computer peripherals, consumer durables,
consumer electronics, fashion accessories, media and games. Flipkart's
products were competitively priced, its customer service was exemplary
and it offered innovative solutions to enhance the customer experience
such as its cash on delivery service. These factors, coupled with a
smart marketing mix and catchy advertisements that sensitized the Indian
consumer to the online shopping experience, contributed to its rapid
growth. While the customer viewed the company with rose-tinted glasses,
all was not well within Flipkart. It was plagued by a multitude of
issues, including a business model that swallowed cash faster than it
was generated, increasing constraints on its operational and supply
chain capabilities and deteriorating investor confidence. Indeed,
Flipkart found itself in trouble in late 2012. With competitors hot on
its heels and the imminent entry of Amazon.com into the Indian market,
Flipkart had to evaluate its options carefully and make some smart moves
if it was to survive and regain investor confidence.