Recently, there has been a drop in revenue metrics at Flipkart. What is the reason behind it?

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Recently, there has been a drop in revenue metrics at Flipkart. What is the reason behind it?

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ANURAG KUMAR · Answer 1 · 2023-07-03T17:05:18+0000

We will start with some clarifying questions:

We are assuming that revenue here means REVENUE FROM ECOMMERCE SALES ACROSS ALL CATEGORIES. Is that Right?
Interviewer: Yes

Is the decline gradual, rapid or due to any seasonality?
Interviewer: Gradual

Was there a recent change in UI or a recent website / app update that had been there?
Interviewer : NO

Is there been a decline in the number of customer visiting the app & Website or any decline in WAU / person?

Interviewer : NO, nothing as such

Has there been decrease in Average bill size?
Interview: No

User Journey:

Customer Vists the app / Website
Searches for the product
Scrolls through the page
Read Reviews / Compare
Add to cart

Pay and checkout

Transaction complete.

Has there been decrease in conversion rate at any of the step in the funnel?
Interview : NO

Let us move on to the external causes:

Has there been an increase in commision for the sellers?
Interviewer: No

Has there been a decline of the competitors as well?
Interviewer: NO, there has been a healthy growth in competitors revenue.

Is there a recent change in government regulations for the industry that might not be in our favour?
Interviewer: No, there has not been any such incident

Has the prices of input items for all the partners companies selling increase?
Interviewer : NO

Has the revenue drop across all the categories, or across few categories only
Interviewer: Across all the categories

Internal issues:

How are the prices against our competitor across categories:
Interviewer: Well you can say it very much similar and competitive.

Are we charging more discount compared to last year on an aggregate level?
Interviewer : No

Consumer preference and choices:
Has there been any change in consumer preferences in their shopping?
Interviewer: There might be.

Are the consumers looking for something while making a purchase?
Interviewer: There might be some changes, as it is always changing. They do prefer reviews, videos.

Are they looking to buy the product, or prefer to rent it till the time the utility is there?
Interviewer: The consumer are intelligent and well informed nowadays.

The competitor have the features or buy second goods for utilty purpose: Yes, some of are dominating the renting space and growing fast.

Is flipkart doing good in the renting space/ second hand goods market :
Interviewer: No, not much investment in that area.

Suggestions
I suggest to try the online renting space and online second hand goods market as the consumer preference is changing and there a clear switch that is been made by the consumer

Tarun Kumar · Answer 2 · 2023-10-24T21:48:22+0000

Clarification needed

Is it gradual or sudden? (This is gradual, indicating change in user behavior)
Is it specific to geo or across geography? (Across Geo)
Is it for mobile, desktop, or specific to the platform (iOS, Windows, MacOS, Android)? (Across platforms and devices)
What do you mean by revenue? (Answer: Flipkart is a platform model, assume that Revenue or GMV = Quantity * Price )
Is this happening for all the users or some cohort of users? (Across all users)
Is it happening across all categories of products or some? (Across all assortments of Flipkart)

Few other clarifications:

Is there a decline in avg. price per cart or avg. quantity per cart (Answer: Avg. quantity per cart)

Thanks for the clarification, let's go ahead now to the funnel KPIs

User launches the app ---- w% --- > User browses the app ---- x% > User adds item to the cart ---- y% --> User goes to the cart ---- z% --> User completes the payment and checks out

Is there a decline in the launch of the app? (No)

Is there a decline in the number of sessions created on the app? (No)

Is there a decline in the number of times items are added to the cart? (Yes)

Is there a decline in the number of users who go to the cart (Yes)

Is there a decline in the number of users who complete the payment and check out (Yes)

So the step where the user browses and adds the item to the cart could be something that needs to be further investigated.

How are users adding items to the cart today?

When they search, they find the item and then add them to the cart.
When they discover items, they add them to the cart.
When they click on items that are recommended for them based on their intent and past behavior, they add the item to the cart.

Metrics to be checked:

Items added to the cart from the search results page
Items added to the cart from the discovery
Items added to the cart from the recommendation

Which of the metrics has seen a decline here? (Items added via search)

Alright moving ahead

I'd like to investigate further why the items are not being added post-search:

This could be due to a change in the search algo
Due to missing or incorrect tags or metadata in the items added by the seller
Images are missing from the items

Based on the above few hypotheses, would like to carry ahead my analysis, uncover the situation, and then recommend solutions.

For instance, if there was a change in the search algorithm, then need to revert and check if the numbers are going up or not. Similarly for the other two sets of hypotheses as well.

Summarize this scenario for the interviewer.

Looking for feedback here.

arpit agrawal · Answer 3 · 2023-08-27T06:39:46+0000

I am sharing my approch here.

Assumptions

Flipkart is an e-commerce marketplace in India.
Doing Operations in India
Earn revenue from its sellers when a buyer purchases from Flipkart.
Considering revenue as “5%” of Total order value.

Revenue = (Daily number of orders)(Avg. order value)(5/100)

Clarifying Questions

Is this a sudden or steep drop? Steep
From how many days we are experiencing this drop? 10 days
Is there a drop in “Daily number of orders” or “Avg order value”? Avg order value

Our Average order value is decreased, so few clarifying questions around “Avg order value” drop.

Decrease in orders of categories like Electronics or high price items?
Decrease in orders from Iphone or Desktops?
Decrease in orders from Tier 1 city?
Decrease in number of orders > 2 or more items.

External Factors affecting our revenue

Decrease in purchasing capacity?
Competitor is running some campaign and giving huge discounts?
Supply change in high value items?

Internal Factors

Bad experience of delivering high value items?
Sellers are not listing their items on flipkart.
Search of high value items are dropped?
Any product changes we have made in last 20-25 days?
Drop in user segment who purchase High order value items?

arpit agrawal · Answer 4 · 2023-08-27T06:38:37+0000