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How did Flipkart convince Indians to buy online?
Product conversation with Arindam Mukherjee, Ex Flipkart director of products
During my teenage years (2005) in Erode, a small town in Tamil Nadu, access to books was limited. There was only one bookstore in town, Vela Book Store, primarily stocked with academic books and a few popular Tamil novels. Finding English fiction and non-fiction books was quite rare, requiring a journey to Chennai, where I would purchase mainly books I truly enjoyed. However, by 2012, after completing my graduation, I obtained my own debit card, activated for online banking purposes, particularly to book IRCTC tickets.
Around that time, Flipkart was gaining momentum and popularity. I decided to take a leap of faith and order a book from Flipkart. Like any rebellious teenager, I was in the midst of exploring radical ideas, so my first order was "Freedom: The Courage to Be Yourself" by Osho. I remember it costing less than 100 Rs. The moment I received the package, excitement overwhelmed me. Unboxing the cardboard packaging, I discovered a delightful surprise—a beautiful bookmark nestled within, accompanied by the scent of a fresh book. It was truly a magical experience.
That singular purchase instilled in me a newfound confidence, instantly granting me access to millions of books available for purchase with just a few clicks. The first-time experience of buying something from an e-commerce platform holds a special place in one's heart. It fills you with a sense of empowerment.
In a nostalgic conversation with Arindam Mukherjee, the former head of products at Flipkart, we delved into the early days of the company and explored the intriguing dynamics of consumer behaviour in India before the emergence of Jio. Arindam, who had previously completed his MBA at Harvard and worked as a product manager at Tripadvisor in the US, joined Flipkart in 2014 and remained with the company for nearly six years. His final role at Flipkart was as a Senior Director of Product for User Experience and Growth.
(The transcript was mildly edited for a better reading experience)
D: What was the compelling factor that brought you back to India in 2014?
A: There were a few simple reasons why I decided to leave the USA at that time. Firstly, I didn't feel settled there. Secondly, when Flipkart presented their offer, I realized it was a rare opportunity. Not only would I be part of a company's growth, but I could also play a role in shaping an entire industry. Such opportunities are few and far between. E-commerce was just starting to take off, and I saw this as a risk worth taking. I wanted to be part of an industry that had the potential for significant growth, not just a single company. Fortunately, things worked out well. Relocating to India in 2014, I joined Flipkart a year after the offer was made. At that time, Flipkart was still small, with only around 25-30 Product Managers. Today, that number has grown to about 350. Witnessing this growth has been incredible. Although it was a risky bet, I was confident not only in the company but also in the industry itself. Seeing the success of Amazon in the USA, and considering the favorable macro factors in India, I knew this industry was on the verge of taking off, and I wanted to be a part of it.
E-Commerce in 2014
D: What was the state of E-Commerce in India around 2014?
A: In 2014, if you rewind the years, you'll realize that most of the traffic used to come from the desktop rather than mobile. However, around 2014-2015, there was a shift towards mobile. When I joined, I remember the internet speeds were still 2G, nothing like the 5G we have now. I rarely used to browse on my mobile; I mostly used my laptop. The major audience at that time, in terms of consumption and purchase, was primarily in metro cities and tier 1 cities. Mobile shipment data also showed an increase from 2015 onwards, especially with the launch of Moto G and the site crash on Flipkart. It was during this time that such products were being launched. Metro and tier 1 cities were the primary markets. Even in those cities, the people who accessed these sites were mostly well-educated, avid readers who were interested in books and similar items. The types of purchases they made online were very different. Nowadays, you wouldn't think twice about buying a large item online, but back then, people bought a lot of books and a few fashion items sporadically. However, everything changed when mobile phones started being sold on these platforms. It was a complete game-changer. Suddenly, people felt comfortable ordering a mobile phone online and receiving it within a day or two, regardless of their location in India, thanks to Flipkart's solid supply chain at the time. The number of people accessing mobile internet started to increase rapidly. I would say even before JIO, which entered the market at the end of 2016, having the right device to access the internet was crucial. Companies like Xiaomi, Motorola, and Samsung played a significant role in the mobile shipments data and looked at India as a lucrative market. They partnered with Flipkart to make mobile devices accessible throughout the country. It was truly a game-changer. Since then, we have come a long way. Many people credit JIO, but I believe that even before JIO, these mobile companies had already made a significant impact.
Building trust with first time users
D: How did users begin trusting Flipkart? Did users ever assume Flipkart to be a physical store located somewhere?
A: When I joined, there was a lot of marketing and branding happening, and the kids' campaigns had already been launched. The stage was very different at that time. However, it didn't surprise me to think that in the early days, from around 2000 to 2010, people might have questioned the authenticity of online transactions. It's natural because, when it comes to financial transactions, you want to ensure that you are dealing with a legitimate source. The concern about authenticity still exists to this day. If someone encounters a completely new website, they may question its legitimacy, and I wouldn't be surprised if that happens. Interestingly, at that time, Flipkart did something unique that not many companies were doing. Everyone talks about cash on delivery being a game changer, and it certainly was. But Flipkart had an interesting approach to inbound and outbound customer support. We are familiar with the inbound process where customers contact the company with questions or problems. However, Flipkart also had an outbound process where they would call customers.
Back then, I hadn't seen many companies doing this at scale. Nowadays, many AdTech and similar companies rely on this model. On the Flipkart site, customers could enter their phone number and select the "call me back" option while browsing the product details page. Flipkart had an outbound customer support team that would call these customers and verify their inquiries. They would say something like, "Madam, did you see this green clutch? How can I assist you?" This personal interaction helped build trust because customers were being called back and speaking with a human rather than just interacting with the website. This approach was a significant trust-building factor, especially when expanding beyond books to higher-priced items.
At one point, this entire customer support unit contributed about 1/5th of Flipkart's overall Gross Merchandise Value (GMV). Eventually, we had to shut down that team due to scaling challenges, but I believe it was a crucial aspect. Not many companies were doing this back then. When I joined Flipkart, we underwent customer training, and I had to make those customer calls myself. It made me realize that selling is a different job altogether because it involved taking part without being overly pushy. The goal was to answer all the customer's questions and build trust, rather than simply persuade them to make a purchase.
D: Do you remember some interesting customer queries from your early Flipkart days?
A: Back then, many people had this question in mind: "Can I really get this product delivered to my doorstep?" There were doubts and inquiries, especially from those who didn't shop online or use the internet frequently. I recall attending those calls, and it was intriguing to hear the specific questions homemakers had about the products. In 2014, Flipkart didn't have any product ratings or reviews; that feature came much later. If you think about it, the product details page only had a few images, the price, delivery dates, and a product description from the catalogue. Even the catalogue itself was quite messy at that time, with some errors. Merely looking at it made it challenging for people to believe that the product was genuine, authentic, and would be delivered quickly. Many queries revolved around these concerns. Today, many of those queries have been addressed. My team worked on resolving many of these issues. Now we have Q&A sections where sellers can answer questions. All that information is available, and we often refer to it. But back then, none of that existed. Customers would ask numerous questions, and I believe the "call me back" option was a brilliant step at that time.
Changing consumer behaviour
D: Indians have a habit of touching and feeling the products before they make a purchase decision, how did Flipkart convince users to purchase without it?
A: Building trust was a significant aspect. We realized that trust depends on several factors. Although I have tried to formalize it into an equation now, back then we didn't have an equation. However, I believe we addressed all the right factors. When it comes to trust, it is a function of credibility, reliability, and authenticity. These are the three major factors. Now, the question is, how do you build credibility? A lot of credibility is established through reviews and other customers' feedback. When other people talk about their purchases and verify them, it adds more credibility. Word of mouth also plays a crucial role in building credibility.
The second aspect is reliability, which focuses on whether the product will arrive intact. Negative stories of items like a detergent bar or a stone getting shipped can harm credibility and reliability. That's why reviews now include attached images and videos, not just about the product but also about the service quality. This helps people understand that they can rely on the product. Additionally, the cash-on-delivery option, where payment is made upon delivery, and the introduction of open box delivery for larger purchases, especially for mobile phones and other products, further enhance reliability. These measures provide confidence to customers, knowing that they can return the product if needed without any hassle.
The final aspect is authenticity. Authenticity is tied to certain behaviors. For instance, when you see TV advertisements, you naturally associate them with authenticity because running an ad on TV requires a significant investment. On the other hand, many digital medium ads lack that sense of authenticity since anyone can run an ad. Shady companies rarely run TV ads, making it an indicator of authenticity. These factors help build authenticity, as viewers associate authenticity with TV advertisements.
Considering the product side, there are several elements to consider. As I mentioned, reviews are important, and ensuring high-quality images from different angles is crucial. Having just one image of a product on a website often raises doubts and discourages customers from trying it out. Even for IKEA products, if a product page has only one image, it may discourage potential buyers. It's important to be aware of these nuances that trigger positive or negative emotions in humans. When building products at Flipkart, we always kept these factors in mind to avoid negative emotions and evoke positive ones. That's how we ended up building trust with our customers.
UX: Buying a book vs buying a refrigerator
D: The decision-making process for purchasing a book versus a refrigerator is entirely different. How does a company like Flipkart handle this challenge?
A: My team specifically worked on this particular problem statement. If you search on Flipkart today, you will notice a distinct experience when searching for a book compared to a washing machine, mobile phone, fashion item, or furniture item. There are different layouts, such as lists or grids, and varying amounts of information displayed for different categories. This is because the buying process for each category is unique and involves different factors and decision-making time cycles.
For instance, purchasing a TV often involves discussing with family members, while buying a book is typically an individual decision with less need for consultation. When it comes to beauty products, offline stores usually allow customers to try the products on their skin to see if the shade suits them. Replicating this experience online requires innovative solutions like utilizing AR technologies or using cameras and filters to provide a similar try-on experience. We understood early on that a one-size-fits-all approach wouldn't work, so we divided our teams to focus on specific categories and deeply understand the buying processes involved. This helped us identify necessary changes to provide a tailored experience.
We realized that a plain vanilla experience with a least common denominator approach wouldn't solve the challenges. By customizing the experience for each category, we witnessed significant improvements in conversion rates. For example, furniture items appear more appealing in a grid layout rather than a list layout. This requires a different focus, including optimizing catalog imagery to specific resolutions and other related considerations.
Even search queries vary depending on the category. For dresses for girls, people may search using specific parameters, while for refrigerators, the search query may be as simple as "Samsung Refrigerator." The search platform also needs to evolve to accommodate these differences, including semantics-based search capabilities.
Every aspect of the user experience needs to be tailored for specific categories; otherwise, it becomes challenging to deliver a satisfying experience. At Flipkart, we put significant effort into this endeavour, and the results have been rewarding. Today, if you compare the experience, it is noticeably different. We approached it from a distinct perspective, and I believe we succeeded in offering a more tailored experience.
E-Commerce predictions from 2014
D: What were the predictions from 2014 that panned out well in the future?
A: I remember quite a few things. One instance was back in 2015 when I told the management, "We need to prepare for Hindi support." they responded, "Arindam, who's going to browse in Hindi? There's not much of an audience." I explained that the audience mix was changing rapidly. From the data, I could see that users from many Tier 2 and Tier 3 towns, where English wasn't widely spoken, were accessing the platform. Despite the initial skepticism, we proceeded with Hindi support. Observing the evolving audience mix allowed us to make informed decisions.
A trend we noticed was the increasing use of cameras. While I personally didn't use the camera extensively, the younger generation was constantly taking selfies. It fascinated me that they weren't just using the rear camera but also the front camera. If someone takes 8 to 10 selfies a day, it made me realize the camera needed to be considered as equal to the operating system. We started thinking about how to center the entire shopping experience around the camera, which led to significant efforts in augmented reality (AR). After I left, many of these initiatives went live, integrating AR effects into the shopping experience. This was the second trend that played out well.
The third trend, which I believe will gain prominence, especially with the advancements in GPT4 and Open AI, is conversational commerce. I've always felt that commerce or transactions inherently involve conversations. When you go to a physical store, you engage in conversation with the shopkeeper, asking and answering questions. Conversations drive transactions. However, this interactive aspect is missing from static messages or static pages in e-commerce. We invested a lot of effort in this area. Perhaps you remember Ping, a product focused on buyer-to-buyer communication. We leveraged technology to explore different use cases, including the utilization of chatbots. During that time, Facebook was developing FacebookM, their take on Messenger chatbots. We believed the chatbot revolution was imminent, and with WhatsApp's entry into the Indian market with WhatsApp Business, we saw more possibilities. We tied several pieces together, but building conversation design was challenging. However, with the advancements in language models like LLMs and the progress made by Open AI, it has become more accessible. Previously, building conversation design required training from scratch with substantial data and various aspects. Although it hasn't fully materialized yet, I'm hopeful and bullish on conversational commerce becoming a significant aspect. Particularly as Gen Z becomes a larger segment of the customer base, having conversational commerce will be crucial to cater to their preferences. So, it's even more important now. Although it hasn't fully unfolded, I believe these are some of the top trends to consider.
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