Info-tech

Flipkart fumbles on the big day as server fails

Priyanka Pani Rajesh Kurup Mumbai | Updated on October 06, 2014 Published on October 06, 2014

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For Flipkart, the poster boy of Indian e-commerce, it was supposed to be a ‘big’ day. But things didn’t quite go as planned as a technical glitch wreaked havoc while other e-commerce firms did their bit to poach customers.

The Bangalore-based company’s much-hyped one-day flash sale — it went by the hashtag #BigBillionDay — garnered $100 million in 10 hours. The figure could have been far higher, but many sales could not be completed due to technical glitches, resulting in slow server access.

“With a large number of people reaching out, Flipkart should have had a data centre to handle peak traffic. This is just another instance of not having a strong back-end to hold on to enormous transactions,” said Sanchit Vir Gogia, Chief Analyst at Greyhound Research, a technology research firm.

Attractive offers

Flipkart had products ranging from cameras to mobile handsets priced at ₹1 or with discounts as high as 80 per cent up for grabs in the sale.

The company tried to give the day a positive spin, saying: “We got a billion hits on our site today and achieved our 24-hour sales target of $100 million in gross merchandise value in just 10 hours.”

However, the discount sale, hailed as the largest ever, faced a backlash on social media. A post termed the sale “Flopkart”, alleging that many products had been “sold out” since 8 am, the time the sales began.

Other reactions on social media were harsher, going from “pathetic marketing push” to “digital consumers are not fools” to “What you actually sold out today is your own damn credibility”. “It was a gross error of judgment by Flipkart … At a time when there is an incredible acceptance of e-commerce, such incidents can mar consumers’ trust,” said Arvind Singhal, Chairman of retail advisory firm Technopak Advisors.

Flipkart’s servers had failed earlier, too, crashing during the launches of the Moto G and Xiaomi mobile handsets.

On D-day, the company deployed an additional 1,000 engineers to prevent any technical disruptions.

Poaching by rivals

Besides technical glitches, the ambush marketing strategies of arch-rivals also played spoilsport. For instance, Snapdeal showcased similar products at much cheaper prices. The New Delhi-based company also posted advertisements stating Monday was not a different day for the company.

While Amazon’s week-long sale starts from October 10, several others such as Fabfurnish.com, Pepperfry.com and Shopclues.comhave also announced discounts, ahead of Diwali.

At a time when the e-commerce industry is scouting for new users, such discounts come a cropper for the industry.

“Many companies theoretically justify heavy discounts by thinking of these as customer acquisition costs. However, several research loops have shown that customers acquired on a discount are typically loyal to the discounts only,” said Suchi Mukherjee, founder of fashion portal Limeroad.com.

“This mode is unsustainable as these firms will never break even on that customer,” he added.

According to Srikanth Chunduri, Founder of consultancy and solution provider e-Mart Solutions, such flash sales may bring traffic, but the conversion rates are not that high.

With inputs from S Ronendra Singh in New Delhi



Published on October 06, 2014
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