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Business News/ Industry / Retail/  Flipkart apologizes to customers for Big Billion Day sale glitches

Flipkart apologizes to customers for Big Billion Day sale glitches

After thousands of customers complain on social media sites, co-founders issue letter expressing regret

Flipkart said on Monday that it took just 10 hours to hit its target of $100 million in gross merchandise value, or the value of goods sold on the e-commerce site. Photo: Ramesh Pathania/MintPremium
Flipkart said on Monday that it took just 10 hours to hit its target of $100 million in gross merchandise value, or the value of goods sold on the e-commerce site. Photo: Ramesh Pathania/Mint

Bangalore/New Delhi: Flipkart co-founders Sachin Bansal and Binny Bansal apologized to customers on Tuesday for pushing up prices of some products, cancelling orders, inadequate product stock and other snafus on Monday, when it hosted its Big Billion Day sale.

Flipkart said that it took just 10 hours to hit its target of $100 million in gross merchandise value (GMV), or the value of goods sold on the site, on Monday. The online retailer had been marketing its Big Billion Day sale for more than 10 days and it offered discounts of up to 90% on gadgets such as Nokia Lumia phones and Samsung Galaxy tablets.

However, thousands of customers complained on social media sites that products were sold out on Flipkart quicker than they could hit “buy" and that the company intentionally took up the prices of some products before the sale so as to make its discounts seem bigger. Flipkart’s website also crashed at times due to heavy traffic and some customers saw their orders being cancelled due to unavailability of products.

Many of these angry shoppers ended up shopping at Flipkart’s rivals, Amazon or Snapdeal, both of which were also offering special promotional offers and deep discounts.

“Yesterday was a big day for us. And we really wanted it to be a great day for you. But at the end of the day, we know your experience was less than pleasant. We did not live up to the promises we made and for that we are really and truly sorry," the Bansals, who aren’t related, wrote in a joint email to customers on Tuesday.

Flipkart conceded its preparation was inadequate.

“And though we saw unprecedented interest in our products and traffic like never before, we also realized that we were not adequately prepared for the sheer scale of the event. We didn’t source enough products and deals in advance to cater to your requirements. To add to this, the load on our server led to intermittent outages, further impacting your shopping experience on our site," the Bansals wrote.

Marketing war

In the race to win customers, e-commerce firms Flipkart, Amazon and Snapdeal are battling each other in a significantly costlier New Age version of the cola wars, using innovative tactics such as cheeky advertising taglines and hashtags on social media to undercut one another.

This marketing war reached its peak—both online and offline—on Monday.

Snapdeal, promoted by Jasper Infotech Pvt. Ltd, ran a print media campaign on Monday mocking Flipkart’s sale with the tagline: “For others it’s a big day. For us, today is no different." While anyone who typed on their browsers landed on the site.

To counter Flipkart’s #bigbillionday hashtag, Snapdeal came up with #checksnapdealtoday, which was one of the top used hashtags on the social media site Twitter on Monday. A hashtag is a common message in comments by people on social media. Flipkart’s sale was mentioned in more than 15,000 hashtags, a mix of favourable and critical comments, on Twitter and Facebook on Monday, according to a person familiar with the matter.

“We only wanted to communicate to the user to check Snapdeal, and the reason why it was trending yesterday was because of the story that unfolded where there was a lot of backlash for some of the competition out there and people started checking Snapdeal and started sharing “checksnapdeal" and it went viral," said Sandeep Komaravelly, senior vice-president of marketing at Snapdeal.

Snapdeal and Amazon also purchased key “search words" such as the names of mobile phone brands and others, so that a user searching for these brands would be shown ads of the e-commerce sites.

“Not surprised that Snapdeal and Amazon worked to piggyback for free on the big Flipkart marketing campaign—it’s a great example of guerrilla marketing," said Ravi Gururaj, an angel investor and member of the Nasscom Product and Executive Council. “In today’s hyper-competitive, multi-channel, noisy marketing landscape, companies must build competitor and community ‘involvement’ or ‘interference’ into any marketing campaign they plan. It’s a free-for-all world out there and often the company paying the big bucks for the original campaign idea finds itself drowned out in the ensuing hullabulla."

Flipkart had marketed its Big Billion Day sales extensively, both online and offline. The company informed all its customers about the sale through emails over the weekend, and ran ads on YouTube, Facebook and others sites, among other things.

“Obviously, there were things we could have done better, like registering the domain," said Mausam Bhatt, senior director, online marketing, Flipkart. “We have good learning around how to shape demand for such properties in future. In future, if we have to do such a thing again, we will think of doing more of exclusive inventory buys, media buys that would lock out competition."

Partly because of the mistakes by Flipkart, Snapdeal and Amazon ended up spending their marketing budgets more efficiently than their bigger Indian rival, said Jessie Paul, chief executive officer at Paul Writer, a Bangalore-based marketing advisory firm.

“It was not like a week-long sale, it was one day; so if you make a mistake on the day, you do not even have the opportunity to go back and fix it the next day. In offline, too, you would hardly see anyone spend this kind of money on a single day sale," Paul said.

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Published: 07 Oct 2014, 08:01 PM IST
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