How can Flipkart beat Amazon in India? [Amazon Interview Question]
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Interviewer: How can Flipkart beat Amazon in India?
Priyanka: To understand the problem in a better way, I would like to seek some clarification.
Interviewer: Yes, please go ahead.
Priyanka: Amazon is the name that represents the Umbrella of services like Amazon Prime, Amazon shopping, Audible, etc. Similarly, Flipkart has so many subsidiaries and a ton of services like Amazon. So, I am assuming we are talking about the competition between Amazon and Flipkart for Shopping.
Interviewer: Yes, you can go ahead with this assumption.
Priyanka: When we are talking about “beating Amazon”, is there any particular metric we are looking at like active customers, active sellers or revenue, etc.? I think we can focus on increasing the revenue of Flipkart, which implies an increase in sales on Flipkart.
Interviewer: That’s a fair consideration.
Priyanka: Before we think of increasing revenue, it is important to discuss the short-term goal and vision of Flipkart so that we know that the strategy we are discussing is aligned with the goal and vision of the company.
Interviewer: Sure, please proceed.
Priyanka: Currently, Flipkart is in a growing phase. In India, it has already made a strong position in Tier-I/Tier-II and metropolitan cities where users have a better understanding of technology. To get its next set of customers, it is imperative for Flipkart to focus on Tier-III and rural cities where users are less tech-savvy and have low-end devices. Once Flipkart is able to acquire these customers, it should be able to increase its revenue.
Interviewer: Sounds correct.
Priyanka: Is there any time/resource constraint I should be aware of?
Interviewer: No, you are not bound by any such constraint.
Priyanka: Okay, I would like to quickly summarise what we have discussed till now. The goal of the problem is to increase the revenue of Flipkart by targeting customers in Tier-III cities of India and rural areas, and we are not bound by any time/resource constraint.
Interviewer: What would you do to solve this?
Priyanka: Okay, to start with here, we have finalised our user segment to focus on a specific user persona. We will go through their journey to see the pain points they face. Then we will find out solutions corresponding to the most pressing pain points. After that, we will talk about the metrics to track whether our solution is working or not. Are we aligned on this?
Interviewer: This is a good structure; please go ahead.
User segment:
Priyanka: Okay, there can be multiple user segments who can use Flipkart in Tier-III and rural areas in India, but if I have to put them into more of a mutually exclusive and collectively exhaustive way, then I will come up with these 3 user segments:
1. Young rural aspirers: who may have low/high ended devices, but they have the internet on their phones and spend quite a time on their phones
2. Mid age homemakers: who want to buy things that are not present in their locality
3. People with disability: who find it difficult to shop every now and then.
Prioritisation of User segment:
All of the above user segments can be a potential segment to target, but if I have to pick one user segment, I will go with Young rural aspirers. In the current area, youngsters have more decisive power in the house than the other family members. We have finalised the user segment to be young aspirers residing in Tier-III/rural areas. Although they may have low-end devices, after the arrival of Jio, the internet penetration has increased, and they are slowly becoming aware of online services. This segment is definitely worth exploring.
User Journey:
The user journey of a user from Tier-III/rural areas is no different from a normal user:
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| User Journey |
Pain Points:
1. Lack of trust: Young aspirers from Tier-III/rural areas find it difficult to trust online services. They are often sceptical about sharing information like card details. They are unsure how the return process will work and fear that they might get scammed.
2. Price-sensitive: Users residing in Tier-III/rural are extremely price-sensitive and want to get the best deals whenever they purchase. They often bargain and compare prices at local shops before making a purchase.
3. Lack of personalisation/relatability: Users from non-metropolitan cities are not able to relate to the products shown on the online platforms. They are not sure of the usage of the product. Even though they want to make a purchase, they are not able to identify themselves with the images shown in the product description.
Pain Point Prioritization:
I would like to prioritise pain points 1 and 3 as safety and relatability are important for any user on the e-commerce application.
Solutions:
Lack of trust:
1. Onboarding sellers from Tier III/rural cities: Flipkart can onboard more sellers from the cities that young aspirers trust and often buy from. Using economies of scale, Flipkart will be able to provide users with better deals and discounts and make them stick to online platforms. Once people are hooked to the convenience like doorstep delivery, wider assortment etc., provided by online services, they will become loyal customers. This will also promote the business of local sellers as they will be able to reach out to customers from metropolitan cities who are not within their reach otherwise. [High Impact] [High Effort]
2. Credits for return: The return policy can get tricky in Tier III/rural cities where users rely on offline payment methods like cash on delivery. In the case of cash payments, if a user makes a return, they can get Flipkart credits which can be used for future purchases. If the user still wants their money back, they can raise a request for the same. This will enable trust-building and increase credibility. [High Impact] [Medium Effort]
Lack of personalisation/relatability:
1. Showcasing models that people identify with: Flipkart can partner with models that people from non-metropolitan cities can relate to better. They can also collaborate with film stars or sportspeople from such areas to promote their platform. This will make people from Tier III/rural cities feel more inclusive. [High Impact] [Low Effort]
2. Buyers in Pin code: To give an idea to users as to what is popular in their area, Flipkart can add a feature where it can portray that “X no. of users in your pin code have currently purchased this product” or “X no. of users in your pin code have added the product in their cart”. This will increase the chance of users buying such products. [Medium Impact][Medium Effort]
Success Metrics:
1. No. of Sales per day from young rural aspirers [North Star Metric]
2. No. of monthly active users onboarded from Tier III/rural areas
3. No. of sellers onboarded from Tier III/rural areas
4. Purchase/Order return ratio by users from Tier III/rural areas
-- TechnoManagers
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