Speaking at the NASSCOM Product Conclave, Vaibhav Gupta, VP Products at Flipkart said that the company does around 20 units a minute in sales right now, compared to 20 units a day in the early days, and scale brings with it its own challenges. “In the early days, the focus was the focus was quick and dirty, and getting a merchant account and a process that works. Then the focus was on “happy flows”. We went around, talked to people and figured out who will get us online. One year ahead, we switched to 10-20 units an hour. The additional focus that came in was customer messaging. We started feeling the pain around the tech limitation, the banking systems around online payments,” he said.
“A lot of times, the money was taken out (debiting), but there was no messaging, and in some cases, messaging was done but the money was pending. We do 20 units a minute now, which poses its own set of challenges. With scale, a lot of our edge cases are becoming real. We have a replacement policy and an EMI policy around large ticket items. An EMI and a refund would typically be a narrow case. We realized that these are very real, and doing even 20 of those a week are very time consuming. Some of the other things which are becoming core is a mindset around security and fraud detection. We used to depend heavily on payment gateways and partners to do it, but now we’re also doing it.”
Other notes from his talk:
Cash On Delivery: “was a big step for us. We started seeing a lot of customer messaging, and they were falling through our checkout funnel.”…”We continue to see that COD is large and growing. 65% of our stuff is COD, and we expect that to increase. A longer term trend is that it will decline”…”On the COD, we do an SMS or call verification for high value items, so we know after the payment has been processed”…”the return rate is one of the biggest issues on COD. Your abiltiy to minimise the return rate is key. The return rate is as high as 30-40%, but you need to have checks and balances, and doing common sense rules around returns. If somebody has usually ordered local books and today is an international books, and we say it will take 15 days, and we call him to tell him. Then he says he doesn’t want it. The other issue with COD is working capital issues, because the money doesn’t get back to you in a decent amount of time. You’re still waiting for the money. The processes are getting better now”…”35% of our stuff is not COD. We are working on improving that because that’s the longer term answer. Second is that in terms of the fully baked costs, I will guess that it is Rs 30-40 costs above regular costs.”
Customer Experience: How do we make sure that the customer experience is obvious to the customer. Our checkout process has been redesigned, and will be redesigned. We’ve had a philosophy for being able to connect with the customer at every part of the process proactively communicating with themthrough email, sms, call, and it has done wonders for our business.
Deciding Payment Gateways: The focus is quick and dirty. The key thing we think should be on customer gateway, and what messaging the gateway sends back.
Payment Method Issues: “we haven’t seen a big change in trends between debit, credit and netbanking. Debit cards are lower than ideal, and I expect it to be much stronger than the other ones, given the history of debit cards. There were debit cards issued without expiry dates and CVV number, and the bank processes around those are not very high.
Telco Billing: Telecom carrier billing is an option but prohibitively expensive. Also, it’s unlikely especially with the way telecom services way consumed with prepaid and most people don’t have substantive balance.”