Flipkart Makes Intelligent Use of IT to Drive Innovation
The Organization: Despite a slow start, e-commerce in India has grown by 70 percent year-on-year, according to the Internet and Mobile Association of India. Leading the pack of e-retailers is Flipkart. The brain child of ex-Amazon employees Flipkart has today become one of the most trusted avenues for e-commerce in India.
The Business case: In 2010, thanks to the new-found confidence of the Indian online shopper, Flipkart’s numbers peaked.
But for Amod Malviya, VP engineering, Flipkart, that came with a caveat. “We had to be careful to not let our rapid growth kill the innovative spirit of the company,” he says. That’s a valid fear. In the business of innovation, complacency holds no ground.
Malviya knew he would have to empower users with new tools to innovate and stay ahead of the pack. But creating a new process wasn’t the solution. “Processes force people to do things in a certain way, killing their creativity. If you remove the bureaucratic headache, people are encouraged to think freely," says Malviya.
While he admits that this approach opens new doors to risk, he knows that it also encourages a fearless culture of innovation—a must-have in the e-commerce business.
The Project: With that goal in mind, Malviya implemented a framework. The framework has two components: One measures the performance of the website through various defined metrics. The second, more interesting one, uses an A/B framework (used to test the success of web marketing campaigns), allows multiple versions of the site to be live simultaneously. This helps the company conduct live experiments by siphoning off a small portion of the traffic and studying the results.
Both components work in tandem. The metrics tool is a dashboard that measures the website’s performance on various parameters. For example, if the transaction rate falls below a certain limit, systems are immediately alerted.
With the A/B component, Flipkart’s engineers can also rapidly implement their ideas. “When someone proposes a new idea, a lot of precious time is spent debating what-if scenarios. Now, we can implement an idea, while mitigating its risks.”
We started streaming metrics on large screens on the engineering floor so that engineers could track performance in real time—unlike most websites that review their performance only once in a week or a month.
For example, whenever an engineer wants to change the design of the homepage, the A/B framework redirects 10 percent of Flipkart’s traffic to the new design. They can evaluate the impact of the change with the metrics collection tool. If it leads to a dip in sales, they can immediately roll it back, and less than 10 percent of traffic is impacted.
“We started streaming metrics on large screens on the engineering floor so that engineers could track performance in real time—unlike most websites that review their performance only once in a week or a month,” says Malviya.
This has been a huge hit with business users who can now float new products and toy with business ideas.
The Benefits: Since the introduction of the tool in mid-2010, the company today sells more than 20 categories of products, clocking in sales of Rs 75 crore a month. In fact, in the last eight quarters, the company has doubled its revenue every quarter.Malviya knew he would have to empower users with new tools to innovate and stay ahead of the pack.