Flipkart is gearing up to launch
its own DigiFlip branded tablets;
why don’t you take a minute to
digest that. DigiFip, the electronics
brand launched in 2012, currently
sells a range of computer and
electronic accessories such as
speakers, pen drives, headphones,
etc.
DigiFlip branded tablets are
expected to boost margins in the
otherwise extremely competitive
electronics retail space. “Cut throat
competition” are staple words to
describe this market space to be
honest; the Rs. 5,000 – Rs. 15,000
range is populated by literally
hundreds of products (tablets) from
tens of brands like Micromax,
Karbonn, Lenovo and others.
Establishing a ground in such a
populated camp, it sure is going to
be difficult.
However, DigiFlip tablets aren’t
dead on arrival. Quite the opposite,
actually! Flipkart has the unique
opportunity to take internal
marketing and turn the tables.
With millions of visitors, a simple
front-page ad of its own-branded
tablets will propagate the word
about their new product(s) more
than a Karbonn or Lava ad usually
does.
In addition, Flipkart won’t even
have to spend much on marketing
if they use their existing assets,
namely their online shopping portal,
optimally.
Also, marketing aside, the company
can really steal a slice of the cake
by launching a few models offering
a range of features. Instead of going
the Samsung route and hitting retail
shelves with various products like a
bad case of termite infestation, half
a dozen DigiFlip tablets ranging
between Rs. 5,000 – Rs. 15,000
could do wonders for the yet-to-be-
announced products.
People will surely ask – Why is
Flipkart entering the electronics
market with tablets?
The $1 billion enterprise wants to
earn more profits, just like any
other business. And margins of
private label electronic products
happen to be around 20% higher
than that earned by branded
products. In fact, the latter earns
less than 10% margin on their
products.
As the industry gets filled with
more brands, profits of every firm
decreases in the long run. Of
course, we aren’t including the
likes of Apple and Samsung who
will continue to boast extremely
high margins on their products.
There were rumors that Flipkart
would launch DigiFlip-branded
Smartphones sometime in the
future. We haven’t heard anything
concrete to support those rumors.
For now, let’s see how the company
handles tablets.
Amazon also has its Kindle range of
e-Book readers.
FlipKart's move to launch a tablet
is also expected to help the e-
commerce firm connect faster with
its consumers.
Another similarity that Flipkart
shares with Amazon is its an
annual membership fee based
service for its customers.
Flipkart First, which is similar to
Amazon Prime premium
subscription service in the US,
aims at rewarding registered
shoppers, which the company
claims are about 18 million for the
portal, as well as getting new ones
on board.
Like Amazon's 'Firefly', Flipkart's
tablet is expected to be integrated
with features that will enable
users to complete transactions with
the firm that sells everything from
apparel to household appliances to
stationery within minutes. Firefly
can identify things like books,
games, CDs etc by pointing camera
at them. It can also capture songs
or TV programmes and gives the
user options to purchase them.
With this move, FlipKart will
compete with global giants like
Samsung and Apple, which are
leaders in the domestic market
too.
However, going by tablet sales
data, the growing demand for
phablets is eating into the market
share of tablets and it is yet to be
seen how does Flipkart markets its
device to catch the consumer's
pulse.
According to research firm CMR,
the tablet sales in India declined
17.5 per cent to 0.75 million units
in January-March 2014 compared to
0.9 million units in the same
quarter last year, pulled down by
higher demand for phablets (six
inch smartphones) and BIS
certification compliance issues.
However, with the consolidation in
the market (as many smaller
players have discontinued their
products), analysts expect sales to
pick up in the quarters ahead.
No comments:
Post a Comment