Home / Companies / Start-ups /  Improved customer service keeps Flipkart on top of e-commerce rankings

Flipkart is finally showing clear signs of getting back to its customer service standards of old under chief executive Binny Bansal, who is pushing his management team to make pleasing customers their main focus by increasing product assortment, offering attractive prices and delivering products faster.

According to the second version of the RedSeer E-tailing Leadership Index (ELI), Flipkart with a score of 95 was ahead of Amazon at 87, while Snapdeal came in a distant third at 66. Paytm was close to Snapdeal with a score of 65, while ShopClues and eBay India scored 59 and 56, respectively.

The index, which will be published on a quarterly basis in Mint, is compiled by research and advisory firm RedSeer Management Consulting, which specializes in e-commerce market research. RedSeer surveyed some 3,000 online shoppers in 30 cities, tracking prices of more than 600 mobile phones across India’s top six e-commerce firms. The index measures the performance of these firms for the period of May-July.

The survey considered three broad metrics: trust in a brand; product assortment and prices; and the overall buying experience in terms of ease of using the e-commerce platform, delivery speed/consistency of orders and ease of product returns or cancellations. It does not reflect sales performance or losses.

From the first survey, Flipkart and the three other Indian start-ups, Snapdeal, Paytm and ShopClues posted significantly improved scores. Amazon India retained its high score of 87. All of this is partly because there is a change in the ELI methodology.

This time, the index was based entirely on customer perception of these platforms, which were then aggregated by an algorithm. In the first index, some weightage had been given to RedSeer’s proprietary data on parameters such as delivery speed and pricing. To ensure more consistency in measuring e-tail performance, RedSeer has based the scores only on customer perception.

Compared with the first survey, Flipkart offered a significantly better web and mobile app browsing experience and retained its status as the most recalled brand in e-commerce. The company also cut down its product delivery time.

Flipkart’s net promoter score (NPS) is improving, helped by returning to a largely inventory-based model, giving the company more control over product quality and delivery speed and consistency. NPS is a key metric of customer satisfaction.

“We have always aspired to build a platform that can provide affordable quality products and making it accessible to millions of Indian customers; this report is a validation of our efforts towards this goal," a Flipkart spokesperson said by email. “We continue to work on enhancing our selection of quality products, scaling our technology platform and supply chain capabilities. We have also expanded our service innovation via programs such as Flipkart Assured, no-cost-EMI and product exchanges. All this has significantly helped in enhancing the customer experience and maintaining our leadership position."

After Flipkart co-founder Binny Bansal took over from Sachin Bansal as chief executive in January, Flipkart has gone back to its roots and shifted toward the retail model. Last year, Flipkart attempted to become a marketplace, which hurt its product quality, product delivery times and overall brand image with customers. (Under the inventory or retail model, a majority of a site’s sales come from a few select sellers)

Binny Bansal made improving NPS among his top priorities. Mint reported on 9 August that Flipkart had set out to achieve three key goals, among others, by September. One, generate monthly gross sales of 3,700-3,800 crore by expanding sales of smartphones, large appliances and fashion; two, achieve an NPS of 55 partly by improving the speed and consistency of product deliveries and improving its product returns management; and three, break even at the gross profit level by cutting staff costs, discounts and other expenses.

While its NPS is improving, sales growth at Flipkart was still elusive until July, when it was exceeded in monthly sales by Amazon India. Although, including its fashion units, Myntra and Jabong, Flipkart was still ahead of Amazon in sales.

The second ELI found that despite entering India only three years ago, Amazon is neck and neck with Flipkart in terms of customer perception. While Flipkart has improved its browsing experience, Amazon’s website and app are still perceived to be better, the survey found.

But Amazon needs to improve the speed of customer refunds, according to the survey.

The other marketplaces had these strengths and weaknesses: Snapdeal’s product delivery speed impressed customers but its overall customer experience including browsing experience lags that of Flipkart and Amazon; Paytm offers attractive prices but its web experience is poor; ShopClues is most popular among shoppers in small cities but its customer experience was inferior to most rivals.

ShopClues, Snapdeal, Paytm and Amazon didn’t respond to emails seeking comment.

eBay, which wasn’t tracked in the earlier ELI, turned out to be one with the lowest brand recall. The survey found that eBay offers attractive prices and a smooth web browsing experience but it needs to build its brand and improve its product returns and refunds processes.

“eBay has been in India for 11 years and has been at the forefront of innovation which has resulted in providing great experience to both sellers and buyers," said Vidmay Naini, director operations and new initiatives, eBay India. “Our friendly and unique policies and tools like PowerShip—a technology tool which ensures smooth functioning of the transaction or PaisaPay—a mode of fast, easy and secure way of transacting that builds trust for both buyers and sellers or for that matter our eBay Guarantee program that covers transaction in case of claims are some examples of creating customer delight and enabling refunds and returns while consumers shop online."

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