Does Flipkart need to move step in step with Amazon?

Flipkart, the leading Indian eCommerce company recently launched its own brand of Android Tablet devices, starting with a Digiflip Pro XT712. Flipkart claims that this step will take it closer to building an eCommerce eco-system. But, with the low price positioning of this device in an already crowded tablet & smartphone market – does this me-too strategy have a strong case?

(Near) Clones from different times, in different places

Flipkart is often referred to as being the Amazon of India. Flipkart, like Amazon started by selling books online and then expanded into other product categories. There was then a step towards selling eBooks via the eCommerce website. It then altered the business model to an eCommerce Marketplace model. Despite these similarities, does the move into tablets space seem right?

Indian Smartphone & Tablet Industry?

Questions come up immediately – Is this industry attractive enough? Is there enough incentive to compete here and try to achieve positive network effects? The Smartphone and tablet industry in India is an extremely crowded industry with over 60+ players in the space.

Strong price competition and product commoditization are strong characteristics of this ma
rket. The leading brands in India Samsung, Micromax & Karbonn take up 60% of the Smartphone space while the rest is extremely fragmented. Add to this the recent announcements at Google I/O 2014. The AndroidOne initiative will give further impetus to low-cost device makers making it hard for consumer to differentiate one tablet/smartphone from the other. And amidst all these dynamics, ENTER FLIPKART at the lower end of the price range.

A look from Amazon’s perspective

Amazon has a strong  experience with consumer electronics devices. The Kindle, when launched was the first of its kind. It was a new category of device a.k.a the e-reader with the much talked about e-Ink. It was a niche device that could render the Amazon eBook format and could leverage cloud delivery infrastructure downloading books via WiFi and WhisperNet.

The new Smartphone,  Fire Phone is positioned as a high-end niche device, competing not with the zillion other Android phone makers, but rather a few premium Smartphone makers in the US market – which is a completely different ballgame compared to the emerging markets.

The value proposition of Amazon’s Fire Phone is also well-defined and centered around Amazon services. Amazon Prime has substantial uptake in the US market. Bundling this subscription allows Amazon to further expand its user base. Trying to bump up transactions through the use of Amazon-specific apps & features is a clear intent. How well that strategy pans out or how drastic that step could be is a debate out of this scope.

For Flipkart, its not the same arena?

In fact it is not even the same game anymore. While this appears as a me-too response to the Amazon Fire Phone launch, I believe that achieving competitive parity can be useful but need not always be meaningful.

Digiflip, Flipkart’s inhouse brand, primarily appears to be an ‘electronic accessories’ brand. A Tablet to augment this line up of accessories is like driving in the opposite direction in a one-way to get into the business. In terms of positioning as well, the Digiflip Pro when compared to the Fire Phone is at a relatively different position on the pricing spectrum.

Over 2000 free eBooks are being offered as a goodie with this device, Flipkart also offers the Flipkart First subscription service, but I do not have enough to compare the popularity of this with that of Amazon Prime – I doubt though that similarities exist.

Will this boost online transactions?

It is widely said that e-Commerce & m-Commerce are the next big purchase channels for consumers. Flipkart is now a leading destination for device makers to sell Smartphones. Motorola sold over 1 million handsets through this exclusive-online retail partner in 5 months. Xiaomi is also planning to partner will Flipkart in its entry into the Indian market. Yet another Smartphone partner is in place – Karbonn, with whom Flipkart made exclusivity deals deal for cheap smartphone.

While these partnerships will boost the main line of business, the entry into ‘cheap tablet’ space could send the wrong-signal to these partners. These partners need to trust Flipkart to sell their devices on the website, than to feel threatened by Flipkart’s cheap competitive offerings.

That being said, would it not be more interesting to partner with these Android device makers like Samsung, Motorola, Micromax, Xiaomi, Karbonn and others to preload a Flipkart App on the device? Flipkart might want to extract more value at a lower cost by preloading the App an fulfil its eco-system intent than to start the line-of-business which is outside is core-business.

Leverage firm capabilities to find growth beyond the core

Flipkart has already started experimenting with its core business model by spinning off its logistics arm – eKart. While I see good merit in leveraging core-competencies to grow beyond its core, investing in this new line of business to gain competitive parity raises more questions than it answers.

(Rumored) Samsung Galaxy S5 – Sustaining innovation?

If This blog entry is to be believed, Samsung’s next flagship release – the Galaxy S5 should come with a faster chipset, fingerprint scanner, metal case, super high resolution display, and a higher resolution camera. Is this a case of sustaining innovation trap that large firms should be careful about? Though Samsung is doing its best to maintain the market leadership, watch out for disrupters!

Xolo Q700i – A bad buy or bad luck?

In the previous post, I mentioned that in the hunt for an affordable value-for-money Smartphone, I had settled for a Xolo Q700i. It has been about two months since I have am using it. Now it is time for a review and verdict about the phone in particular and the company in general.

For those who would like one-liners on evaluation metrics, here’s the brief below.

• Experience with Brand Xolo: Not Happy at all
• Product Specification: Good. At par (and above) some competing products
• Product Performance: Could have been way better. Audio & GPS give issues
• Service Network: Coverage in terms of number of cities is bad
• Service Experience: Dissatisfied – Xolo Care doesn’t care

Overall verdict: Will look out for other brands before trying a Xolo again!

To start with why did I choose the Xolo Q700i? I had spoken to a couple of friends before I made a purchase decision – to be fair they hadn’t encountered any problem with their handset. The specifications present online are encouraging given the price point – A Smartphone at Rs.10000/- with 1GB RAM, 1.2GHz Quad-Core (albeit a Mediatek), 2GB internal memory, 8MP camera (this wasn’t critical for me) and lastly a USB OTG ( I can connect a USB memory stick directly to the phone!).

Why did my initial excitement with this brand get killed?

I’d say upfront: if you intend to use the GPS Navigation on this rule it out! I also had trouble with an elementary function – the in-call speaker stops working at its will & I guess its a manufacturing defect. These few aspects have done serious damage to my perception of Xolo. Here’s a more detailed description.

• Audio: This has been a biggest let down. Imagine buying a smartphone that works well and in two weeks the speaker (used for normal phone calls) stops working! Not so smart any more. Though I can still check my email, read about technology developments in the world through the browser BUT when a friend calls me – I can’t hear him on the phone! The engineer in me (and I also worked on mobile handset software in my pre-MBA days) wouldn’t recede. Looking for an Engineering Mode for Xolo, I altered an audio setting in the software which seemed to resolve the problem. But alas, after about three weeks again the problem relapsed. Now here, I must thank my four year old daughter – she accidentally dropped the phone and voila the speaker started working! (And we used to joke about mechanical systems – give it a slap and it starts to work). I believe it is a manufacturing defect – a loose connection within the board causing the speaker to work on and off! Slap it and its on, slap it again and its off!
• GPS Navigation – Where are the satellites? This is yet another horrendous experience. The receiver on the phone would just not latch on to the GPS satellites. Again, an online research of similar problems seemed to indicate issues with GPS services with MediaTek chipsets! My fault – didn’t do my research well before I bought the handset! All these posts had a variety of suggestions about the possible cause. A few said the antenna connections are not strong enough to do the job well (which would be real bad news for me). Some suggested that GPS configuration settings on the handsets by Disabled by default, hence download (some) EPO setting files and alter a few more config parameters to ease this. Having tried all this, after much pain I could get the phone to latch on the GPS satellites. But imagine driving on a fast and busy Indian road, you’re expecting to take the next turn and bam! the GPS latch is gone – its is again “Searching for GPS”! The use of GPS in India might be questioned, but my experience with GPS on other high-end phones in India (like the iPhone) has been extremely great – so that rules out a problem with those billion dollar satellites up in the heavens. Its my cheap phone that is struggling to stay put! (I could get it to improve after I followed steps here). Posts like these (1 and 2) show how prevalent GPS Navigation problems are on Mediatek chipsets. Why doesn’t the Xolo software take care of these initially?
• Phone restarts / Software Reset: For some unknown reason, after a few weeks of use (which includes installations of certified software, frequent browsing and email checking) the phone would just restart at almost every touch. I get an alert – touch – reset. Again touch to clear alerts – reset. Launch an App – reset! Finally I did a Factory Reset to see if it is fixed – fortunately yes. But I have had to do this almost three times till now. Imagine with all the data and apps we install on a heavy usage phone – the amount of time is takes and productivity it kills! 

Now, the not-so-dark-side of this purchase.

• Display: The 4.5 inch bright display is impressive, especially in bright outdoor conditions. The ambient light sensing ability also works well giving the user clarity in the display. The colors are bright and the pixel density is good value for money.

• UI & Touch Responsiveness: For an Android phone at about Rs.10000 it is quite responsive. I haven’t seen any lag in animations & applications launch instantly. The user-interface is non-cluttered. I had tried the Samsung Galaxy Duos and even the S4 (which is far more powerful), but my first reaction was ‘why is the UI so cluttered’. A bunch of icons spread across the multiple screens along with the alerts wasn’t much to my liking. The Xolo on the other hand is quite clutter-free. Ease of access to the application shortcuts, widgets and menu items is something I value.

• Smart Features: There are a few useful ‘smart’ features. I know a few people who diligently switch off their Smartphone at night and switch it on in the morning – yes everyone has their reasons. The Q700i has a neat ‘Scheduled Power On-Off’ feature – you set the shutdown and power-on time & days of week, and the phone does the rest. You needn’t worry about switching it on in time. Especially useful when you are in a bus or train journey at night – the roaming network-searches eat up the battery before you reach the destination or if you’ve forgotten to use the airplane mode. The Xolo Power Management app has a few cool features: toggle your data connection at regular intervals of 5, 10, 15 … minutes when the screen is off! This saves some battery life & data consumption otherwise eaten up by the auto-sync options. A ‘Night Mode’ disables mobile-data mode during the set time-window. These are small but well thought features. Add these to the 2400 mAh, it can push up the battery life.

• Camera: Honestly haven’t tried much of this as I am not a major mobile-phone camera fan. But yes it works.

That’s it. All done and dusted. Now, one would say why I didn’t go back to the store to replace the piece? (Unfortunately) I had bought it online from a faraway state – so that is out of the window. 

Then, why didn’t I approach the customer care? Xolo has an interesting app – “Xolo Care” installed on the handset – it has the ability to send the IMEI number by SMS and has pointers to call & email the customer care – they will get back to you! I was impressed at first but am now disillusioned by its presence. I have sent SMSs multiple times but have had no response. The call-center – well like the online reviews speak about Xolo’s customer care(noteworthy ones are this & here as well; you would however find scores of such reviews online) – they basically read out the address of the nearest service center I would have to visit. For reasons of my own, I really do not want to undergo the ordeal of waiting for months and speaking to the same customer-care executive (who’s just doing his job) about a problem he cannot solve and await a possible solution!

For  me, there are three possible solutions. First – give me my money back. Second – give me a new piece with these issues resolved (They should be the ones doing engineering right in the first place and not me spending time on forums to find solutions). Third, spread the word and let the future probable customers know on what to expect!

If Lava International Ltd. Director & Co-founder Mr. Vishal Sehgal and Business Head (Xolo) Mr. Sunil Raina are serious about taking this brand to the next level (even closer to MicroMax), they have to make the product team work harder, make operations team work on service issues better and ensure good-quality end-products out of the assembly line! Word-of-mouth is a powerful tool in the current scheme of things! A cluttered marketplace with similar handsets need more than just a bright display and 8MP of camera. Delivering on promised parameters and a good service proposition will help ensure customer stickiness.

So much for now – maybe I will go back to the better-known brands after all. As I wrap this up, I still wonder was this a bad buy or bad luck?