Co-founders Sachin Bansal and Binny Bansal were working for Amazon when they decided to break into the fledgling e-commerce business in India in 2007. When they started the company, they focused on a single item, books. However, they soon began adding other items to its now extensive catalog. As the business grew, there were many challenges since people in India were leery of shopping online. During its early inception, Flipkart faced a significant setback with online payments. Hence, the company added a Cash On Delivery Option, which blazed the trail for other e-commerce platforms in India that use the option today. Another thing Flipkart did early on was to revolutionize the supply chain management system, launching a platform unique to Flipkart. Despite its ups and downs, they still remain the most significant e-commerce retail platform in India, even outranking Amazon in several categories. After disrupting the industry, they have opened the door for many entrepreneurs who want to work within the e-commerce industry. These are 20 things you didn’t know about Flipkart.
1. Focused on the future
Flipkart has noticed exciting trends in the e-commerce vertical they want to include the Kirana or corner store ecosystem. The company believes that brick-and-mortar stores will start partnering with online stores. According to Economic Times India, Flipkart is flexible in its approach. They feel they will be part of the 60 to 70 percent e-commerce rise in India.
2. It’s just smart
One of the things the company is focusing on is smartphones. In fact, 60% of its sales come from customer’s purchases of the devices. However, back in 2016, they still didn’t have a clear path to increasing these sales. What they realized is that they weren’t communicating effectively with the brands they wanted to sell. Now, instead of working with the companies because they want to sell their products, they focus on working with smartphone companies so they both can profit.
3. What an angel
When the company started in 2007, Binny Bansal was one of the first investors. Although, he started out selling books door to door for the company. However, Bansal became an integral part of the business. One of the things that made him so important was that he came from an unrelated vertical. Even though the company has scaled a lot in the past decade, Bansal feels the most crucial piece of the puzzle was meeting the two co-founders who already had many ideas on effectively doing SEO in India.
4. The customer is always first
Flipkart has maintained the same focus throughout its history, putting its customer’s needs at the forefront of the business. According to Your Story, Flipkart puts its energy into inventing and shifting the standards of what an online retail store needs to look like. Additionally, it feels the most critical metric is the NPS or net promoter score. The company believes if those numbers are solid, everything else will fall into place.
5. Talent is everything
Aside from their customers, Flipkart is passionate about hiring the right people to propel its company forward. The company feels that it’s best to hire people who just graduated college or haven’t found their career path. These people are more likely to be flexible and adapt to the early ups and downs. However, they don’t hire people with little to no experience because, without some background, they wouldn’t understand things like supply chain operations or how logistics work.
6. Just Merge
When Flipkart was in its infancy, it needed to focus on mergers and acquisitions since it focused on a wide range of products. When the company started, they primarily focused on books. Since they were already a media company, the next step was to focus on digital music. So, they partnered with Mim360, a company that sold pieces directly to companies. However, much like other aspects of the company, when the idea didn’t work out, they once again made a switch to something more profitable.
7. 2020 vision
During the pandemic, many people turned to online shopping because they felt unsafe going to stores. Although many of the purchases were for household items or impulse purchases, online grocery shopping also saw a huge push forward. Flipkart wants to capitalize on this in India. In 2020, the company began to shift some of its items to make space for a grocery platform. Currently, they are working towards partnering with Ninjacart. However, they know breaking into this vertical is going to be a challenge. One of the things that India is focusing on is the smaller stores for grocery offerings. Flipkart is cautiously optimistic they will go against some of the more significant players and succeed.
8. Check it out
One of the things that set Flipkart apart from its competitors is the high premium on advertising. The company feels that they will have additional pieces other companies do not have for sustained growth because they’ve created a side platform specifically for this. According to Business Insider India, Flipkart’s advertising platform is one of the top five in India. Moreover, the company is continually strengthing and expanding to create better systems and has recently partnered with MediaMath to launch the platform.
9. Highest bid
In 2017, Flipkart acquired the Indian division of eBay who will get $500 million in stock from the company. This agreement was part of a multi-level concept with China’s Tencent Holdings LTD and Microsoft Corporation contributions. At the end of the trade, Flipkarts investments totaled 11.6 billion dollars. After this deal, Flipkart became the definitive player in the e-commerce market, just behind Amazon. According to Forbes India, senior vice president of retail sales, Ankur Bisen, “this proves the investors’ conviction in the Flipkart story.”
10. Never satisfied
Despite Flipkarts tremendous growth in the past several years, CEO Kaylan Krishnamurthy feels the company can do much better. India has approximately five million internet users in their company, but Flipkart only sees a small percentage who buy products online. It feels that is still a lot of room for growth, and they can find more ways to encourage users to make more purchases on their platform.
Much like one of its biggest competitors, Amazon, Flipkart moves 90 or nothing to improve and find the proper steps to the most significant possible growth. They credit a lot of the company’s success to its employees. Although many companies who work in a similar vertical have a total staff of around fifty thousand employees, Flipkart’s employees total only eight thousand. The company feels this gives them more control and allows them to have the quality of employees instead of a more extensive employee base who’s not as qualified. Moreover, with a smaller staff, everyone’s unique talents and leadership styles have the opportunity to be showcased.
12. Fashion forward
When the company looked at its core values and how it wanted to scale, another item they felt was essential for the platform was clothing. So, they partnered with Myntra, a company that prides itself on being a clothing store for discerning shoppers. However, since both companies are separate entities, they worked diligently to put them on the platform while keeping the two companies separate. It was a smart move because the company has two-thirds of online shares in the fashion industry and maintains India.
13. Quality vs. quantity
Flipkart feels that customers question how well they might work instead of offering products at super low prices. The company has implemented a different option. Some of the products on the platform offer an exchange program, so the customer can return their old product for a newer one. It feels that this works better than a rebate which may take several months or longer to process.
14. Correct what isn’t working
The company likes to start each year off with a set of goals to propel Flipkart forward. One of the things they noticed several years ago was the company’s customer-centric approach was slipping, and Amazon was starting to gain more of an edge. However, they immediately caught the mistake and were able to turn things around in six months. Additionally, in 2015 they tried a business model with an app-only approach, which quickly proved ineffective. So, they changed directions and collaborated with Google, who helped them design a progressive app that works seamlessly with a web page through an app.
15. Class of the e-commerce titans
Flipkart is the leading Amazon in India. According to Bloomberg Quint, fashion is one of the top online purchases in online sales in India; 19.6 billion dollars and Amazon is 31% of those sales. Yet, Flipkart has a 1% lead over the company. Moreover, once their subsidiaries are added, Myntra and Jabong, the number jumps to 39.5%. Even with Flipkart doing so well in these sectors, it’s still the only place with an advantage over Amazon. Interestingly, Amazon had an option to purchase Jabong, but it passed. Since Amazon prefers to remain the leading online shopping platform, they will invest more money into the Indian market; time will tell if they succeed. However, Flipkart’s response is to try to scale their online grocery business, which is worn Amazon has a more significant piece of the pie.
16. Everyday low prices
In 2018, Walmart acquired Flipkart for 16 billion dollars. According to Quartz India, Walmart saw a little bit of fallout when its stocks plummeted on the New York Stock Exchange because acquisition would substantially cut into Walmart’s bottom line, which the company acknowledged they would narrowly miss. However, Walmart was looking at the long-term potential with Flipkart and saw many attractive features. CEO Doug McMillon and COO Judith McKenna felt that Flipkarts had far too many lucrative segments to pass up. Additionally, they were interested in the companies payment model and also the employees in the company. When asked about the company’s digital payments, McMillon responded, “it is an essential piece of the puzzle to build the entire e-commerce ecosystem. Flipkart has made many risky moves over the years. It is confident that this partnership will help propel the company to new heights like the others.
17. Getting Ready
According to Live Mint, Flipkart is currently making plans for an IPO, an initial public offering. Even though they feel like they are getting close, they want to take additional time to make sure the company remains profitable and is scaling and cash positive. Additionally, the IPO would first go through the board before any final decisions are made. When asked, the company said this was one of its current focuses.
18. Business to Business
Since the company has strong relationships with local companies, they want to add features to help those businesses. The Kirana or corner store e-commerce platform. To add additional value, they are working on a line of wholesale products using its best price model to help these companies add an additional revenue stream with Flipkart providing the logistics.
19. No worries
According to Brown Tape, there are 8 tier 1 cities in India and 3,133 tier 2 and 3 cities. Flipkart saw massive growth in all levels during the pandemic and a dip afterward. However, they have continued to see a rise in tier 1 and 2 markets, making them feel optimistic about its future. Moreover, the growing trend of retail e-commerce in India will help sustain Flipkart.
20. Know your worth
On July 12, 2021, Economic Times India ran an article about Flipkart’s latest evaluation and funding round. The company jumped from a 24.9 billion dollar to a 37.6 evaluation after a 3.6 billion dollar funding round. The company hadn’t done a funding round since Walmart acquired the business for 16 billion dollars in 2018. The budget round is excepted to help Flipkart take on rival companies like Amazon, Reliance Industries, and the Tata Group. Some of the key players in this round were Soft Bank Vision Fund 2 and Walmart. Qatar Investment Authority, who was a previous investor, also contributed. After this funding round, Walmart will own approximately 75% of the business.