Flipkart Success Story

Quick Facts

Introduction
A quick look into any success story shows a path breaking idea at the heart of the tale. Flipkart is
no exception. It is not the idea itself but the conviction to convert ideas into action and action
into results is what defines a true success story. Measured by that yardstick, Flipkart has been a
hugely successful.
History

Back in 2007, when Flipkart was launched, Indian e-commerce industry was taking its beginner
steps. The company is registered in Singapore, but theyir headquarters are in the city of
Bangalore, India.

Founders

Sachin Bansal and Binny Bansal, who were working for Amazon.com had an idea to start an ecommerce company in India. Both of them are alumni of IIT, Delhi and are native of
Chandigarh, India. They left their jobs in Amazon to start their own business.
One can easily call that a risky move. In a country where people have various tastes and
preferences, an ecommerce start-up will always have enormous challenges. In India, people often
prefer to shop in person and buy goods they see and like. Today, thanks to Flipkart, e-commerce
has become one of the fastest growing sectors in India.
How it Started

Flipkart began selling books to begin with. It soon expanded and began offering a wide variety of
goods. Innovating right from the start, Flipkart has been home to few of the striking features of
Indian e-commerce.
Fundings History

In the first few years of its existence, Flipkart raised funds through venture capital funding. As
the company grew in stature, more funding arrived. Flipkart repaid the investors faith with
terrific performances year after year. In the financial year 2008-09, Flipkart had made sales to the

tune of 40 million Indian rupees. This soon increased to 200 million Indian rupees the following
year.
Their last round of Fundraising had increased their value to $ 15 billion, however, as of February
2016, according to Morgan Stanley, their estimated value stands at $11 billion.
Evolution

Back at the time when Flipkart was launched, any e-commerce company faced two major
difficulties. One was the problem of online payment gateways. Not many people preferred online
payment and the gateways were not easy to set up. Flipkart tackled this problem by introducing
cash on delivery and payment by card on delivery in addition to others. Flipkart was the first to
implement the popular Cash On Delivery facility, which every online shopping website in India
offers as an option today.

The second problem was the entire supply chain system. Delivering goods on time is one of the
most important factor that determines the success of an ecommerce company. Flipkart addressed
this issue by launching their own supply chain management system to deliver orders in a timely
fashion.
Today as it stands, Sachin Bansal is the Chairman of the company and Binny Bansal is the CEO
of Flipkart.
Acquisitions

Flipkart also acquired few companies like Myntra.com, LetsBuy.com etc., to better their
presence in the market. With the entry of Amazon.com in India, the competition between the
companies has seen many takeovers. Flipkarts journey from a small book e-retailer to Indias
largest e-commerce platform inspires a generation of start-ups. In a country where stereotypes
are common, Flipkart managed to break the norm and change the ecommerce industry in India
for ever. Flipkarts story proves that if you have a great idea, and you are a doer and not a
thinker, success is not far off.

Full history
Flipkart, a company which started with a mere investment of Rs. 4, 00,000 to develop its
website, has undoubtedly grown up to be one of the biggest e-commerce players in the Indian
peninsula. In this fast pacing world, shortage of time is big crisis and acts as a big push for
consumers to shop online. In this article, we will venture into how the company grew in such a
short span of time. Also, Techstory would give you insights into history and future prospects of
the company.
Flipkart was founded by Mr. Sachin Bansal and Binny Bansal, alumni of Indian Institute of
Technology Delhi, in October 2007. In its initial phase of operation, Flipkart was registered as
Flipkart Online Services Pvt. Ltd and sold only books. Co-Founder of Flipkart and achiever of
Entrepreneur of the Year Award 2012-2013 from Economic Times, Mr. Sachin in an interview
acknowledged that how he thought founding the company was most ridiculous thing he has ever
done and how others around him thought he was insane doing so. Soon, the company grew
bigger and ventured into selling other products such as electronic goods, e-books, stationery
supplies, fashion and life style products as well.

As more and ore consumers turned to Flipkart for shopping, investors turned to Flipkart to
support the companys future strategy. The company raised 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. But company took everyone by surprise when it announced that it raised $1
billion from already existing investors including Tiger Global Management LLC, Accel Partners,
and Morgan Stanley Investment Management and a new investor Singapore sovereign-wealth
fund GIC.
New York-based private equity company Tiger Global Management LLC is the largest investor
in the company today. Till today, the company has privately raised about $2.7 billion in multiple
rounds of funding.

Flipkart also grew via acquisition. The company acquired many firms such as WeRead in 2010,
Mime360 and Chakpak.com in 2011, Letsbuy.com in 2012 and then myntra.com ( Indias largest
online apparel store) in 2014.

However, the idea of Flipkart (online retailer) was not something unique as e-commerce was
booming everywhere and there were several companies operating in this domain. Then what
pegs Flipkart above other firms? Well! Sachin believes that quality of the service provided is
what sets Flipkart apart from other ventures like theirs. What differentiates them and paves their
way to success is excellent quality of service being provided by them at which their competitors
have lagged behind. To add to list, availability of all sorts of goods of various categories,
enhanced online shopping experience, pre as well as post sales experience, are the companys
key differentiators.
The bigger you grow, tougher the challenges you face and harder it becomes to overcome them.
The same falls in line for Flipkart. In its early stage, two major challenge encountered were to
get book vendors on board with Flipkart as it didnt have a book store and then to obtain the
approval for an online based credit card payment gateway. The founders however faced every
challenge headon ! Sachin recalls how he and Binny used to stand outside Gangaram Book
Stores, Banglore and hand over Flipkart bookmarks to only those who were coming out with
books in hands; to ensure that their target was correct. They had to make several assumptions and
start slowly by building good business relations with consumers and suppliers. Sometimes these
assumptions would turn out to be wrong and they would need to change the direction. But every
time they committed a mistake, it taught them a lesson.

Flipkart hit GVM of $1 billion in March 2014. GVM is the value of good sold or gross
merchandise value and is calculated on monthly average sales. Currently the value of good sold
or gross merchandise value (GMV) on Flipkart is $4 billion.
The company has set the target to reach a GVM of $8 billion, add 100,000 sellers on its platform
and sell 25 million products per month by the end of this year.The company is also said to have
set a target of selling 1 billion goods in a year by the end of 2017.
In 2014, the company reported that it had 15,000 employees working for them.

Currently with massive increase in Flipkarts user base, maintaining a good user experience is a
major challenged posed to company. Flipkart has adopted the strategy to invest a significant
portion of its raised fund into supply chain efficiency, building a better talent pool and
technology innovation. Moreover, taking logistics to all terrains within country including towns
and villages, making payment gateway options secure and easy for the consumers are other
major challenges.
By mid 2016, Flipkart is planning to raise a minimum of USD 5 billion through an Initial Public
Offering (IPO) listing in New York Stock Exchange (NYSE). This will be the largest public offer
by any Indian business till date and will value the company at over USD 30 billion.

Be it selling products worth Rs. 650 Crore on The Big Billion Day or exclusive tie-ups with
companies such as Motorola Mobility and Xiaomi Tech, the company stands for converting
every challenge into an opportunity. On the brighter aspect, with such a huge amount of raised
funds and consumer base, there lies a potential of India producing a $100 billion company, one
of the most difficult task ever but possible. Sachin wants Flipkart to be that company. The aim is
set and next step is to deploy strategies to achieve the same.
Online Book store!
They say that books are mans best friends but according to the present scenario
bookstores are mans best friends. Being online is a cherry on the top. YourStory brings to you an
exciting new way to buy books online in India and thats Flipkart. Flipkart is a passionate and
determined group of professionals that wish to create an excellent buying experience for you by
leveraging the best of breed technology. Sachin Bansal and Binny bansal are the great brains
behind this succesful venture. The duo describes their entrepreneurial yearning in a conversation
with YourStory.
Please tell us something about Flipkart?
Flipkart.com is the largest online book store in India. Currently Flipkart has over 4 million titles
listed; ranging across all categories such as Fiction, Non-Fiction, Literature, Educational,
Professional and Technical, Religion and Philosophy, Entertainment, etc.
Where did you get this idea from?
Idea itself is not new. The genesis of the thought to set up Flipkart came from the bad quality
service provided by competitors. Our business opportunity was to do better than our competition
in terms of service. Hence, our main mission was to focus on customer service. As a start-up
company with ambitions in the e-commerce domain, we had to choose a category that could
facilitate getting started quickly. The low transaction size helped induce customer trials. With
our strong technology background, we could keep the initial costs low.
What is your target market?
The book market in India is pegged at Rs 10,000 crore of which 1% is being bought online.
Flipkart has a market share of 20 25% out of the overall online sales. The online segment is
growing at 50% year on year as online payments have become more secure. The family of book
buyers on Flipkart is spread across the country, with registered buyers in every city and small
town today. Currently speeding along at the rate of more than one book sold every minute, we
have registered sales of more than five lakh books in the past two years and look forward to a

promising future. In India, book readers across the country with internet access could use our
services. Our services are also open to book buyers outside the country who can make purchases
and have it delivered to their loved ones anywhere in the country.

Why Flipkart ?

An attractive neutral name is what we looked for. Good domain names were hard to get. We were
looking at names that did not just speak of books alone, but one that could suit any category of
products that we may add in future. Also, we wanted to have a catchy name with high recall
potential. Flipkart could in simple terms mean Flipping things into your Kart
What sets you apart from other ventures like yours?
The process involved in online shopping for books has gone through drastic changes and is more
secure right now. A customer could use our user-friendly web page to place an order, once the
order is placed online the book is taken off the online inventory. In case of unavailability it
will be purchased from a supplier. The Book will then get packed and couriered on the same day.
Flipkart is currently tied up with around 12 courier service providers. We also use Indian Postal
services to reach areas without courier providers. Logistics play an important role in our
business. Our key differentiators are Availability of variety of goods of various categories, online
shopping experience on the site and post sales experience.
Why did you choose to be an entrepreneur?
We saw a good opportunity in the market around e-commerce. Also, a regular job was not as
challenging. The excitement and satisfaction that comes with building something of a long
lasting value is addictive enough for us to continue this.
How has this journey been?
The journey was quite challenging. Getting customers, suppliers, etc to trust has been a
challenge. We overcame it by persevering in the face of challenges. We started by identifying
people who could trust us initially and slowly built upon our good business relations with them.
We had assumed a lot of things, especially around marketing. When those assumptions turned

out to be incorrect our business model had to be changed. We have changed directions multiple
times and have taken each mistake as a learning experience.
What has been the growth trajectory of Flipkart?
We started off in 2007 by setting up three centers across India without funding. Six months ago,
we reached number one status. We are also four times bigger than our nearest competitor. We
started off small; today we have grown ten times over the last one year and aim to touch the Rs
100 crore mark by March 2011. We currently have hundred and twenty employees across three
centres New Delhi, Mumbai and Bangalore. We have plans to expand to at least two other
cities this year.
Where do you see Flipkart in the coming future?
We aim to reach the Rs. 100 crore mark and hope to expand our operations to many more cities,
by 2011. We are planning to enter into sales of products such as DVDs, Electronic gadgets and
mobile phones in the near future.
Tell us something about your achievements?
We have been featured in Business Today as one of the top 25 startups of 2009. We were also
nominated for Ernst and Young award for the best entrepreneur of 2010. Apart from that we have
been featured multiple times in startup news as well as mainstream news. Today, we are
recognized as number one in the industry. As a testimony to the superior customer experience,
the company has consistently recorded repeat purchase rates of more than 50%. We have also
managed to get a registered buyer in every small town and city. We hope to constantly improve
our service standards.
Any tips for the coming entrepreneurs?
Don't start out alone, it helps to have a co-founder when things are not going your
way.Perseverance and hard work is very important. The core of any business is to earn money.
You have not done your job well until you find a stranger who is willing to open his/her wallet to
give you money for the services/products that you a offering. The next step after that is to focus
on scaling it up well.
In 2007, two twenty something IIT, Delhi graduates quit their cushy jobs at Amazon to turn
entrepreneurs. Backed only by their passion, Sachin and Binny Bansal were determined to start
an e-commerce company in India. As expected, the news of them quitting their job to become
entrepreneurs did not receive a warm welcome by their parents, who reacted fiercely to their
outrageously impractical idea of leaving their jobs and risking their future.

Back in 2007, companies were struggling with poor internet penetration, limited engineering
skills and scratchy customer experience. After weeks of planning and rethinking their plan, they
started Flipkart in a two-bedroom apartment in a residential locality in Koramangala, Bangalore.
They spent several sleepless nights but were persistent in their decision as they envisioned the
flourishing opportunity in e-commerce in India. Like Jeff Bezos, founder of Amazon, they
started off with selling books and eventually, by the end of 2008, they started receiving more
than a thousand orders a day. Flipkart has been on the rise since then and has raised over $1
billion in funding.
In September 2015, Sachin Bansal along with the co-founder of Flipkart, Binny Bansal, was
named the 86th richest person in India with a net worth of $1.3 billion by Forbes India Rich List.
The Bansals have fought hard to raise the bar of e-commerce buying experience in India.
Here are seven lessons we can learn from the duo responsible for the creation of one of Indias
largest e-commerce companies.

Your business should delight your customer

When the Bansals began their e-commerce journey in India in 2007, customer experience was
poor. E-commerce was just beginning to bloom with travel sites such as IRCTC and makemytrip
gaining traction. Flipkart wasnt the first in the business but they definitely were the first to focus
on customer service as their core theme. They knew that building trust would take them a long
way in the e-commerce game.

Diversify where you need to

During their initial years, Sachin and Binny struggled with logistics, relying on creaky logistics
of India Posts and private courier companies. But things began to go sideways with Flipkarts
foray into electronics. They realised that they could not depend on third party logistics partners if
they wanted to do diversify their product range. So they built their own logistics network called
ekart which enabled them to add a lot of value added services like cash on delivery, returns
management, try-and-buy in fashion.

Image Source: huffingtonpost

Always experiment
The Bansals, since the very beginning, believed that focusing on customer experience will
differentiate them from the clutter and help them capture a larger market share. They used the
Flipkart platform as their playground and didnt hesitate to experiment. They did small changes
in design and UI, sometimes every couple of hours, to see how it impacted consumer behaviour.
Being an online portal, they would get instant feedback which they used to better their
customers buying experience.

Start with building depth

For the first three years, Flipkart was known as an online books vendor. Before they expanded
into other product segments, the Bansals wanted to ensure they could provide the best customer
experience, management bandwidth, and capital and infrastructure. They only sold 100 books in
2007 and on December 31, 2007 they even had a zero order day. However, by end of 2008,
Flipkart had crossed over a thousand orders a day and in 2009, they started getting noticed in the
book business.

Expansion will take a toll, but learn to adapt

When Sachin and Binny took the big leap and diversified into electronics, their customer service
experience dropped sharply. When buying a relatively low-value item like a book, one can
deliver it to a neighbour or the watchman of the building. The same wouldnt work for expensive
electronics. The Bansals had to completely re-engineer their business model which took a years
worth of work on technology, supply chain, logistics and marketing.

Shift quickly from execution to ideation and strategy

Initially, as a small company selling books, both Sachin and Binny would be involved with daytoday execution. They even handled customer support. They admit that they never had a forecast
of the business for over two or three months at any given point in time. They realized their
shortcomings in 2008 when they were trying to raise funds and were rejected by several
prospective investors. This experience led them to divert their focus from execution to strategy.

Work with people who believe in your vision

The Bansals faced a lot of rejection from the investor community when they were looking for
funding. Tiger Global, a global investment firm, was much more entrepreneur friendly than most
other VCs and believed in the Bansals vision for Flipkart. Sachin and Binny said in an interview
that Tiger brought a long-term thought process to the table, rather than accounting for every
dollar spent. When Tiger Global invested in Flipkart, investors woke up to the potential in this
sector.
5 things entrepreneurs and co-founders can learn from Flipkarts Sachin and Binny
Bansal

lipkart is an Indian e-commerce megastore that is headquartered in Bangalore. Founded by two

Indian Institute of Technology, Delhi graduates in the year 2005, Flipkart initially focused on
online sales of books. However, the vision of the co-founders Sachin Bansal and Binny Bansal
resulted in the manifestation of this billion dollar company. Slowly, but surely, Flipkart started
selling electronic goods. This e-commerce website has several path breaking stories up its sleeve.
1. Begin at the Bottom:

This is an elusive principle that is often mocked and ridiculed. More often than not, people
get embarrassed when they become the office bearers of less elite and not-so esteemed
designations. Many young men, in pursuit of a lucrative career, do away with the principle of
Begin at the Bottom. By beginning at the top, business heads and administrators are completely
slow on the uptake. Due to the lack of the nitty-gritty of operations at every level, the complete
organizational framework tends to be inept and incompetent. It was just a pittance of 10,000
from their parents that helped the co-founders launch the e-commerce site. The co-founders
understood the executive cadres manifest in each level. It is better to climb a staircase one step at

a time, rather than attempting to reach the top in one leap.

2. Avoid splitting hairs:

The co-founders have been cautious enough in avoiding splitting hairs. Despite their opinionated
and diverse personalities, the two co-founders displayed the bite and penetration to reach a
mutual consensus on business related themes and concerns. They embraced the gospel truth- true

respect cannot be demanded, but must be earned.

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3. High octane performance:

People of their ideologies let their achievements walk the talk. However, achieving something
out of the box and rising above the mundane is never a pushover. What it takes to chase ones

dreams is high octane performance.

4. Invest in People:
The co-founders have been exceptional in hiring top notch programmers and outstanding digital
marketers. Their market research analysts and financial analysts have been phenomenal. Thus,
they have been the paragons of investing in people. Top performers are usually paid fat salaries.
You must also read what motivates an individual to join a startup?

5. Understand and enrich each other:

The co-founders discovered the potential among themselves and used it for a right cause. A
frequent object of contention in several established conglomerates such as Reliance and startups
such as Housing.com is the failure of co-founders to be in rapport with each other.

With
courage, determination and vision, the co-founders carved a niche for themselves.

Here is a timeline of the Bansal Brothers' journey:

2007: Alumni of Indian Institute of Technology, Delhi, Binny Bansal and Sachin Bansal founded
Flipkart in October 2007. Initially, the e-tailer sold only books. Before starting the company the
duo worked in Amazon.com.
2008: The portal went online and started selling books online. Now, Flipkart is India's largest
online bookstore selling more than five lakh books since its inception, according to media
reports. Bansal said, "We sell a book a minute."
2009: Flipkart raised funds worth $1 million from venture capital funds Accel India.
2010-2011: The e-tailer raised funds worth $10 million and $20 million from Tiger Global in the
year 2010 and 2011 respectively.
2011: Flipkart launched pre-paid wallet to store money online. This feature allows shoppers to
shop online and store money on the site and use it to purchase items without using their credit or
debit cards for transactions.
It was an initiative to make online payments easier and more secure for customers.
2012: The portal raised around $150 million which was its fourth round of funding from MIH
which is a part of Naspers Group and ICONIQ Capital.

2012: The company launched Flyte, an online digital music store. Flyte was a one-stop shop for
all kinds of music in all languages. Music was available at a price ranging from Rs 6 to Rs 15 per
song on the platform.
2013: The company raised around $200 million on July 2013 from its existing investors which
includes Tiger Global, Naspers, Accel Partners and ICONIQ capital.
2013: Flipkart launched seller marketplace which is essentially a virtual mall where shoppers
get access to all the brands at one place. Reports say that customers even got to compare sellers
and get the best prices for various products.
2013: Flipkart shuts Flyte-- This move raised a lot of questions to which Flipkart said that the
company shut Flyte because it was running at a loss and when music was available for free,
people didn't want to pay for it.
2013: Launched PayZippy, an online payment solution for its Indian merchants. With PayZippy,
online and mobile payments became easy and handy without entering card details, name or
billing address every time.
2013: Flipkart raised $360 million from its existing investors.
2013: Flipkart launched an Android app for its customers which offered them with an ability to
browse and purchase products from their smartphones. It allowed them to navigate through
different products and departments from books, entertainment, accessories and more.
2014: Flipkart hits $1 billion in annual Gross Merchandise Value (GMV). The company
reportedly reached this goal which was supposed to be achieved by 2015.
2014: In its strategic investment, Flipkart shuts PayZippy and invests in Ngpay.
2014: Flipkart acquires Myntra in an estimated $300 million deal. This deal was marked as its
biggest consolidation in the e-commerce space.
2014: Big Billion Sale-- Flipkart started Big Billion sale for its customers where mobile phones
and tablets were sold at its lowest prices available. Although there were some glitches reported
with the website, the company managed to sell products worth Rs 650 crore in 10 hours.
2014: Flipkart raised a total of $1.91 billion funding form its investors.
2015: The company claimed 150% sale growth on August 10. The company said that it has sold
150 million products till date.
2015: Flipkart launched Ping on August 15, which lets people chat with their friends using the
app. It even lets people share photos, wishlists and products in the cart with friends.

2015: E-commerce major Flipkart's co-founders Sachin Bansal and Binny Bansal, along with
some others investors, invested $3,50,000 in real estate start-up 'Plabro Networks'.
2015: On September 22, Flipkart appoints Dan Rawson from Amazon, Ravi Byakod from
Google and Anand Lakshminarayanan from Microsoft.
2015: Binny Bansal and Sachin Bansal made it to the Forbes list of top Indian billionaires.
The company has set the target to reach a GVM of $8 billion, add 100,000 sellers on its platform
and sell 25 million products per month by the end of 2015.The company is also said to have set a
target of selling 1 billion goods in a year by the end of 2017.
How did Sachin Bansal and his partners start Flipkart?
It was a 10,000-a-month allowance from their parents for almost 18 months that
helped Sachin Bansal and Binny Bansal launch an e-commerce website retailing
books in October 2007. Today, the near-20% stake they hold, along with the top
management, in Flipkart is valued at almost Rs 2,000 crore.
The duo pooled in Rs 2 lakh each and with two computers launched the site from
their two-bedroom apartment in Koramangala, a primarily residential locality in
Bangalore where the company now has multiple offices. For 10 days, the site did not
see a single sale and then a customer from Andhra Pradesh placed the first order for
the book 'Leaving Microsoft to Change the World' by John Wood.
I know its not the answer that you wanted but thats all I was able to salvage.