Flipkart, the marketplace that hosts almost 1 lakh sellers and has over 10 crore registered users. They have a catalogue of 8 crore products with their platform selling over 50% of the phones sold online.
With a lot of buzz around the Flipkart deal, perhaps it is a good time to trace the origins of the company and look at its evolution. Two IITians, Sachin and Binny Bansal decided to sell books online and in October 2007, they started Flipkart with an initial investment of Rs. 4 lakhs.
While both of the founders worked at Amazon, they are said to have drawn inspiration from Alibaba. Sachin Bansal has often said that he saw Flipkart as an Indian Alibaba rather than an Indian Amazon.
As soon as the website was up, Sachin Bansal posted the link on his blog. Their first order was for a book called Leaving Microsoft to Change the World from Mahbubnagar in present day Telangana. At this time, the company was operating out of a two BHK flat in Koramangala, Bangalore. In their first month, they serviced over 100 customers.
As a part of their promotional efforts, they distributed bookmarks outside Gangarams, a prominent book store on Church Street. From distributing bookmarks, their market strategy now has a really innovative tv commercials where kids talk like adults.
In 2009, they received their first investment from Accel Partners who invested $1 million and $10 million from Tiger Global.
By 2010, they had increased their revenue to Rs. 20 crores. During their initial phases, they struggled with convincing people that the platform is a safe place to transact and not a fraud. In May that year, they launched the Cash on Delivery service to build consumer confidence. Given the complexity of their delivery schedule and service, they also launched their own delivery service called Ekart in 2010. Over the years, they kept increasing their product offerings are by 2011, they have electronics, mobile phones, movies, etc. covering 600 towns and cities. They began their acquisition quest in 2010 with WeRead, Chakpak (2011), Mime360 (2011), Letsbuy.com (2012), Myntra (2014) and so on. Their most famous acquisition recently was that of Jabong (2016). Acquisition became central to their growth strategy. A $160 million funding round in 2013 helped fuel this. Not all of them have been successful, with some of the services being shut down.
2013 was a critical year as Amazon entered the market. Flipkart’s undisputed status was not being threatened and challenged. With their losses also mounting, there was a cry in the media about the sustainability of the business. Especially with Amazon entering the market, many had written off Flipkart as just another casualty in Amazon’s path.
In 2014, they also started strategically tying up with mobile phone companies. They tied up with Motorola for their exclusive launch of Moto-G. Much later, there was also Xioami. The legendary flash sales that ended in 5 seconds came into being. Some of their acquisitions such as Jeeva, an after sales services company that helped ensure that appliances bought were installed within 24-48 hours. Ekart continued to be the strongest weapon in their arsenal. It caters to 90% of their business and covers over 6500 pin codes (India has 40,000). The company received $1 billion in funding that year at a valuation of $7 billion.
2015 saw the beginning of the Big Billion Day Sale. They sold over $200 million in three days. The following year, they sold over $224 million. There are some crazy statistics that also came out with these activities. This move forced Amazon also to start its own sale.
Along the way there were differences of opinion. The day to day management was managed a Tiger Global backed person – Kalyan Krishnamurthy. But the two founders are looked up to. With all this success, the two founders have been influential figures in the Indian startup ecosystem. They have also made a killing and are estimated to among the richest in the country values at $1.24 billion each. They were on the Time list of 100 Most Influential people in 2016.
A few years ago, Sachin Bansal had said “…history will remember us for two things. To consumers, Flipkart will be remembered as the company that created Indian e-commerce, that brought to the average Indian’s doorstep a wide range of affordable, quality products. The other is Flipkart’s contribution in creating the startup ecosystem in India. Hundreds of startups focused on solving for India have been inspired by Flipkart to create products that improve people’s lives. Flipkart has instilled confidence in budding entrepreneurs that world-class tech-product companies can be built in India as well. These, I think, are our greatest achievements.”
Picture Credits: Trak.in