Better customer service keeps Flipkart on top of e-commerce charts

Flipkart, under CEO Binny Bansal, is finally making a clear case for returning to its old standards of customer service, urging its management team to focus on customer satisfaction above all else by increasing its product range, offering attractive prices and delivering products faster.

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

The index, which will be published quarterly in Mint, is compiled by e-commerce research and advisory firm RedSeer Management Consulting. RedSeer surveyed around 3,000 online shoppers across 30 cities, tracking prices of over 600 mobile phones across six of India’s largest e-commerce companies. The index measures the performance of these companies over the May-July period.

The study looked at three broad metrics: brand trust; product assortment and pricing; and overall shopping experience in terms of ease of use of the e-commerce platform, speed of delivery/order consistency, and ease of returning or canceling products. It does not reflect sales or losses.

In the first study, Flipkart and three other Indian startups, Snapdeal, Paytm and ShopClues, posted significantly better results. Amazon India maintained its high score of 87. This is partly because of a change in the ELI methodology.

This time, the index was based solely on customer perceptions of these platforms, which were then aggregated by an algorithm. In the first index, some weight was given to RedSeer’s proprietary data on parameters such as delivery speed and pricing. To ensure greater consistency in measuring e-commerce performance, RedSeer based the results solely on customer perceptions.

Compared to the first study, Flipkart offered significantly better browsing experiences on its websites and mobile apps and maintained its status as the most mentioned brand in e-commerce. The company also reduced the delivery time of its products.

Flipkart’s Net Promoter Score (NPS) is improving, helped by a return to a largely inventory-based model that gives the company more control over product quality and the speed and consistency of delivery. NPS is a key metric for customer satisfaction.

“We have always strived to build a platform that can provide affordable, high-quality products to millions of Indian customers; this report is a validation of our efforts towards achieving this goal,” a Flipkart spokesperson said in an email. “We continue to work on improving our selection of high-quality products, scaling our technology platform and supply chain capabilities. We have also expanded our service innovation through programs like Flipkart Assured, no-cost EMI and product exchanges. All of this has significantly helped in improving the customer experience and maintaining our leadership position.”

After Flipkart co-founder Binny Bansal took over as CEO from Sachin Bansal in January, Flipkart went back to its roots and shifted towards a retail model. Over the past year, Flipkart has tried to become a marketplace, which has hurt the quality of its products, the delivery time of products and the overall brand image among customers. (In an inventory or retail model, most of a site’s sales come from a select few sellers.)

Binny Bansal has made improving NPS one of his top priorities. Mint reported on August 9 that Flipkart has set a target of achieving three key goals, among others, by September. First, generating gross monthly sales ₹ 3,700-3,800 crore by increasing sales of smartphones, major home appliances and apparel; second, achieve an NPS of 55, partly by improving the speed and consistency of product deliveries and streamlining product returns management; and third, achieve break-even in gross profit by reducing staff costs, discounts and other expenses.

While its NPS has been improving, Flipkart’s sales growth remained elusive until July, when it was surpassed in monthly sales by Amazon India. Although, including its fashion units, Myntra and Jabong, Flipkart still outpaced Amazon in sales.

The second ELI study found that despite entering India just 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 as better, the study found.

However, the study says Amazon needs to speed up the process of refunding customers.

The other marketplaces had the following strengths and weaknesses: Snapdeal’s speed of product delivery impressed customers, but the overall customer experience, including browsing, was inferior to that of Flipkart and Amazon; Paytm offered attractive prices, but its online experience was poor; ShopClues was most popular among small-town shoppers, but its customer experience was worse than most of its rivals.

ShopClues, Snapdeal, Paytm and Amazon did not respond to emails seeking comment.

eBay, which was not tracked in the previous ELI, emerged as the brand with the lowest recall rate. The study found that eBay offers attractive prices and a smooth browsing experience, but 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 a great experience to both sellers and buyers,” said Vidmay Naini, Director, Operations and New Initiatives, eBay India. “Our user-friendly and unique policies and tools like PowerShip, a technology tool that ensures smooth transaction experience or PaisaPay, a fast, easy and secure transaction mode that builds trust between buyers and sellers, or our eBay Guarantee program that covers the transaction in case of claims, are some examples of how we create customer satisfaction and facilitate returns and complaints while shopping online.”