Flipkart hopes customer loyalty will come bundled with tablet sales

India’s tablet market has slowed down.
India’s tablet market has slowed down.
Image: AP Photo/Kathy Willens
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A week after Amazon’s announcement of its Fire Phone, Flipkart, India’s biggest shopping website, has launched a tablet under its in-house label Digiflip. The company was so far selling only digital accessories under that label.

The company’s move seems to be driven by multiple motivations—a desire to soak up sales in the target market and earn higher margins, as well as to drive usage of the company’s mobile app. Internet users on mobile in India is growing faster than those who use internet on desktops. Amazon’s experience has shown that Kindle owners tend to spend more money shopping on Amazon than others.

The tablet, Digiflip Pro XT 712, is a 7-inch tablet priced at Rs9,999 and runs the dated Jellybean version of the Android platform. While the company is hoping that the specifications will help drive sales for the product, the overall tablet market in India has been slow, with customers choosing to move to using phablets, or phones the size of tablets.

“We have customer data from a large number of customers who shop using Flipkart to know that there is a gap in the tablet market. Earlier the market was growing on the consideration of how the tablets are priced, but customers are increasingly paying attention to specs of the product,” Pradeep Dodle, director of retail at Flipkart, said.

One analyst said Flipkart might be misreading the market.

Vishal Tripathi, principal research analyst at Gartner, says the gap in the tablet market is not because of specifications, but more in terms of possible uses for tablets as far as customers are concerned. “The specifications and features are excellent. But there are other tablets in the price range; they haven’t priced it too aggressively. Secondly customers overall are switching to using phablets or phones for content consumption, which is what tablets are also primarily meant for,” he says. Flipkart has entered when the market is mature, and by now people know that tablets have some limitations in terms of usage, he adds.

While Dodle says that the product has been launched because Flipkart being such a large retailer, feels responsible towards its customers and wants to fill the gap in the market, Tripathi of Gartner believes that there is a different reason for the launch. “The company has seen tablets of other companies selling on the portal and knows that if it manufactures and sells its own tablets, it will help Flipkart get a larger margin,” he said.

This, as we noted earlier, might sour ties with other brands that sell tablets on Flipkart.

For after-sales service the company has tied-up with a partner. The tablet will exclusively be available on Flipkart and will come bundled with shopping benefits worth Rs9,000. The product will have Flipkart’s e-book application and the shopping app pre-installed. “There is an in-built software in the device which will help us track if a customer is shopping using the tablet, which will enable us to give special discounts and benefits to those customers,” Dodle said.

The tablet which has a metal body, is also 10% thinner than others in its class, the company claimed. “Tablets with the specifications we are providing will typically cost between Rs14,000-17,000 in the market,” Dodle said.