The eruption of the COVID19 pandemic has led to many repercussions in various industries across the world, from education, health, retail, transport to tourism. Yet when we put in focus the sector of E-Commerce, we realize the impact of the lockdown has been largely favorable to this industry in particular as well as for the ones that are involved in it, be it directly or indirectly, opening up an avenue of potential opportunities for the booming sector.
While the pandemic has overturned pretty much every aspect of our lives, the reliance of the users on online shopping has escalated tenfold now when it's no longer just an option and more of a necessity. Amidst the COVID-19, a bizarre number of consumers have tilted towards online shopping as a preferred alternative in terms of availability, convenience, and safety factor.
One prominent e-commerce firm that has gradually flourished further amidst this pandemic is Flipkart. Starting out in 2007 as an online bookstore confined within a two-bedroom apartment in Koramangala, Bengaluru, the service has now expanded as one of the biggest companies in India, becoming an inspiring example of the scope of success held by Indian startups.
“We were not thinking about numbers then, but we knew something big can be built out of e-commerce.”- Binny Bansal and Sachin Bansal, the founders of Flipkart.
Flipkart is among India’s dominant e-commerce platforms. It was started in October 2007 with its headquarters residing in Bengaluru. Founded by Sachin Bansal and Binny Bansal, the online venture had initially begun as an online bookstore but as the firm’s fame escalated, it grew and expanded its activities.
The platform started selling a variety of other products like music, mobile phones, as well as movies. With e-commerce gradually revolutionizing the world of retail and garnering its momentum in India, Flipkart expanded at a rapid pace steadily supplementing various new item categories in its collection.
Presently, the company facilitates over 80 million+ products across the range of over 80 categories from mobile phones & accessories, computers, laptops, books and e-books, home appliances, electronic goods, clothes and accessories, sports and fitness, baby care, games, and toys, jewelry, footwear, and so on.
In the month of November 2020, as per Walmart, Flipkart registered a record number of monthly active customers. In order to ascertain prompt delivery to its user base, the firm presently contracts over 1 million square feet of space in various areas which include Mumbai, Hyderabad, Bengaluru, Lucknow, Ahmedabad, etc.
Flipkart has been founded by Sachin Bansal and Binny Bansal. Both being 2005 graduates from IIT Delhi, were officially exposed to the retail sector while working at Amazon. The two met at the workplace and explored their mutual interest in bringing about a change in the e-commerce industry of India.
This led to both quitting their jobs at Amazon in 2007, setting off to create a similar e-commerce company such as the one they worked for but focused specifically on the Indian user base. The two wished to offer Indians an online store that was created in India which led to the making of what we all now know as Flipkart.
Flipkart Business Model
Comprising more than 150 million products in 80 categories, Flipkart stands as one of the dominant e-commerce companies in the nation.
The platform adopts social media platforms like Twitter, YouTube as well as Instagram for promoting their items. Being a Business to Consumer model firm, it offers its users the freedom to select their sellers and items from an extensive assortment of options.
With the customers getting increasingly reliant on online shopping and the convenience it provides, the online retail sector has a promising scope for further expansion in the future with Flipkart seeking full advantage of this shift in their sector’s favor.
One of the principal USP of this platform is its pricing. The platform is known for offering branded products at more or less economical prices. Aside from this factor, users are also offered intriguing perks and discounts. A couple of its additional benefits include its cash on delivery (COD) feature, its refund policy as well as its customer service.
The platform facilitates a massive category of products ranging from everyday appliances to high-end beauty items. This has made the shopping experience pretty convenient and flawless for its customers. There are also items that have been allotted the Flipkart Assured product badge. This implies that they are assessed and double-checked to ensure better safety as well as quality.
The Progress of Flipkart
From 2009, Flipkart set up more centers in Mumbai and Delhi aside from their center in Bangalore. The platform initiated its acquisition binge in 2014 when it purchased Myntra for an amount of $400 million. Later in 2016, the platform set off to purchase the fashion website Jabong for $70 million. In 2017, the company purchased the payment website PhonePe as well as the e-commerce corporation eBay.
The platform also consolidated all of its Bangalore offices to develop a single big campus across 8.3 lakh square ft. In 2011, Flipkart set up an office in Singapore.
In 2018, Flipkart was acquired by Walmart with a 77% share of the platform now possessed by the US retail giant.
From the time of its launch till 2016, Sachin Bansal had reigned as the CEO of Flipkart. From 2016 onwards, Binny Bansal took over as the CEO with Sachin becoming the Executive Chairman. Presently the company’s CEO is Kalyan Krishnamurthy, a Tiger Global executive.
The largest revolutionary moment for Flipkart was definitely when it was acquired by Walmart. The platform has witnessed a massive degree of growth and advancement from the time it was started in 2007, prompting the emergence of various startups in the country. The platform has been able to enhance its product categories from the sole category of books to millions of items with a variety of sections.
This has played an integral role in strengthening the belief of foreign and national investors in Indian startups. As per recent news, reported by TechCrunch, Flipkart will acquire Walmart's Indian cash-and-carry wholesale business as the e-commerce firm focuses on enhancing its offerings for mom-and-pop stores.
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Flipkart has also announced its introduction of Flipkart Wholesale as part of the arrangement.
Recently the company has started a hyperlocal 90-minute delivery service termed Flipkart Quick in Bengaluru across categories including grocery, mobiles, electronics, and home accessories. Through this launch, the firm has ventured into items like fresh fruits and vegetables, as well as meats and milk on its platform.
The platform has also invested in the fresh produce supply chain firm, Ninjacart, and other local vendors with the goal of building a supportive ecosystem. It also roped in logistics firm Shadowfax to build last-mile support for Flipkart Quick.
As per a statement by Flipkart, reported by the Economic Times, the company recently crossed over 1.5 billion visits per month and Claire's 45% growth in its monthly active customers as well as a 30% enhancement in transactions per customer for the fiscal year 2020.
Flipkart presently stands at a valuation of $24.9 billion USD in the year 2020.
The company’s primary investment had been infused by the founders themselves, which was a sum total of 5,600 USD. Post this followed the investment from Accel India and Tiger Global among whom, Tiger Global remains a key investor of the company.
A few of the key investors of the platform include eBay, Axis Bank, Manhattan Venture Partners, Naspers, and Softbank Vision Fund. The biggest turning point for the platform was when it got acquired by Walmart in for $16 billion, with Walmart acquiring a 77% stake in the company.
As reported by NDTV Gadgets 360, Flipkart’s most recent funding was the $1.2 billion (roughly Rs. 9,048 crores) it raised in a recent equity round which was headed by its majority owner, the US e-commerce giant Walmart. The freshly acquired funds will be invested in two parts during the remaining fiscal year, the firm stated.
The platform is now in talks to raise at least $3 billion from investors including SoftBank Group Corp. and several sovereign wealth funds, as of June 2021.
Flipkart has raised $560.45 million from Walmart as part of the $1.2 billion round it announced in July.
With the popularity of e-commerce services boosting exponentially in the past couple of months, Flipkart shows a huge promise of rising consistently in popularity and developing a success story that will be remembered and recited by young enthusiastic entrepreneurs for many upcoming years.