There is always a path-breaking idea, at the heart of the tale, which makes a success story. Flipkart is no exception. It is not the idea itself however the desire and conviction to convert ideas into action and action into results is what determines a true success story. Measured by that yardstick, Flipkart has been a hugely successful startup. It is the biggest made in India online store selling almost everything on the Internet in India. It is the biggest competitor of Amazon in India, which is the biggest e-commerce website in the world. Flipkart as a startup initiative was founded by two Indian entrepreneurs – Sachin Bansal and Binny Bansal.
Flipkart, which started with a mere investment of Rs. 4,00,000 to build its website, has undoubtedly grown up to be one of the biggest e-commerce players in the Indian peninsula. It has given India it’s one of the biggest startup success stories.
How it all started
When Flipkart was launched in 2007, the Indian e-commerce industry was taking its beginner steps. Two bright minds, Sachin Bansal and Binny Bansal, who was working for Amazon.com, had an idea to start an e-commerce company in the country. One can easily call that a risky move. In India, where people have diverse tastes and preferences, an e-commerce start-up will always have enormous challenges. People in India often prefer to shop in person and buy goods they see and like. However, thanks to Flipkart, e-commerce has become one of the fastest-growing sectors in India today.
Sachin and Binny, bored with their mundane jobs, wanted to create a search engine dedicated to e-commerce websites. However, they soon realized that there were very few websites of this kind, and this when they came up with something like Flipkart. They left their jobs in the hopes of shaping the future of e-commerce in India at a time when this field was steadily rising. Both of them had one thing in common between them. They both loved books and founded Flipkart as a platform that catered to book lovers.
Want anything, Flipkart made it available. Inherently, Flipkart means: Flipping things into the cart. A couple of months into the business, they realized they had a larger target audience to tap. The small startup soon expanded and began offering a wide variety of goods. With innovation at its heart, Flipkart has been home to a few of the striking features of Indian e-commerce. It was the first e-commerce company to implement the popular ‘Cash on Delivery’ facility, which every online shopping website in India offers as a payment option today.
Challenges met at early phase for Flipkart
When Flipkart was launched, it faced two major difficulties. One of the problems was online payment gateways. There were not many people who preferred online payment and the gateways were not easy to set up. Flipkart addresses this problem by introducing cash on delivery and payment by card on delivery in addition to other payment methods.
The other problem was the entire supply chain system. On-time delivery of goods is one of the most important factors that determine the success of an e-commerce company. Flipkart tackled this issue by launching itssupply chain management system to deliver orders in a timely fashion.
Story of Fund Raise for the Business Expansion
In the initial years of its existence, Flipkart raised funds through venture capital funding. As the number of consumers turning towards Flipkart for shopping increased, investors turned to Flipkart to support the company’s future strategy. The company raised funding of US$1 million in 2009 from venture capital funds Accel India, and later on US$10 million in 2010 and US$20 million in June 2011 from Tiger Global. Later, Flipkart left everyone amazed when it announced that it raised $1 billion from already existing investors including Tiger Global Management LLC, Accel Partners, and Morgan Stanley Investment Management (MSIM) and a new investor Singapore sovereign-wealth fund GIC. Investors’ faith was repaid by Flipkart with terrific performances year after year.
During the financial year 2008-09, Flipkart had made sales to the tune of 40 million Indian rupees. This momentum was maintained and the sales increased to 200 million Indian rupees the following year. Thereafter, Flipkart also acquired few companies like Myntra.com, LetsBuy.com, etc., to better their presence in the market.
Flipkart has managed to open the doors to an e-commerce friendly India and this was only possible because of the founders who created rather than just sitting on their thought. A true success story like this doesn’t come too often and when it does, it makes sense to stand up and notice.