Flipkart is currently the absolute online retail leader in terms of scale and valuation in India. They recently raised $150 million from Tiger Global which raises their valuation to $850 million. Not bad for a company which was started in the founder’s apartment with a starting capital of 5 lakh rupees in 2007! Sachin Bansal and Binny Bansal are both IIT Delhi grads who left their jobs at Amazon to kick start the e-commerce revolution in India.
Flipkart may still have many aces up its sleeve. They have perfected their logistics and are currently diversifying, not unlike Amazon when you come to think of it. They have recently added more categories to their online inventory, made a few interesting acquisitions and are thought to be working on a music offering. The company has also put a lot of effort and cash into marketing and advertising all over the country. The campaign of theirs in not just for people who are savvy with the Internet but for everyone in general and according to Sanjay Bansal, CEO of Flipkart, “the ads are addressing problems associated with online shopping, while creating awareness of the benefits of e-commerce among offline shoppers.” He further believes that a 10 fold growth is indeed possible.
The Indian Internet population is also growing at a good rate. More and more people are getting into buying things online once they realize how simple it all is and we think Flipkart has done a stellar job at popularizing online retail among the masses. They have an early mover advantage combined with the fact they have understood the Indian market and innovated accordingly, their ‘cash-on-delivery’ option being the case in point. People keep talking about an e-commerce bubble but we don’t think it is a bad situation. E-commerce is on the way up as products are cheaper and easier to get online.
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