Flipkart – From a Start-up to a Million

Dollars Brand.
Company’s Profile:
Binny Bansal and Sachin Bansal founded Flipkart in 2007, registered it in Singapore and based
its headquarters in Bengaluru, India. It is an online E-commerce platform wherein the
customers can buy and buyers can sell multiple products on the online platform. Initially, the
company was started out as an online bookstore and through years, it has reached the
equivalent position to Amazon in India with an array of around 20 million products across the
range of more than seventy categories. Flipkart made several acquisitions during its initial
growth phase. In 2018 the company was acquired by giant retail corporation, Walmart.

Acquisitions/Subsidiaries Date
Upstream Commerce September 09, 2018
Liv.ai August 21, 2018
ebay india August 01, 2017
PhonePe April 01, 2016
Myntra May 22, 2014
Mallers October 17, 2011

The main categories of company’s portfolio are books, media, consumer electronics, lifestyle,
and personal and healthcare products. The Company provides services like cash on delivery and
a 30-day replacement policy. It also offers in-a-day guarantee and same-day-guarantee, as well
as an annual subscription service, Flipkart First.

Business Model:
This online platform is a B2C portal which provides shopping opportunities to
the Indian consumers. It allows the sellers to sell their collection of products
by giving appealing discounts to its consumers who wish to buy them. The
buyers choose the products they like to buy and are hence shipped to them.
The sellers get an agreed price after deducting the Flipkart’s commission for
their services provided to these sellers.

he various options for selling and buying through Flipkart are through

o Flipkart website
o The web app
o The mobile app
o Social websites
o Affiliated networks like review websites, coupon websites, bloggers, etc.
The percentage of the commission charged by Flipkart varies from the type of
products and type of sales. It may range to 5-20% excluding taxes and
discounts.

The various options taken by Flipkart while formulating its business model include:

 Enhancing the overall website of Flipkart.

 Introducing the web app to the users.
 Introducing the mobile app to the consumers and the optimization of the same.
 Promotions of the products and services on the various social websites like Facebook,
YouTube, Twitter, Instagram and much more.
 Proper offline advertisements and promotions based on the banners and the TV
advertisements.
 Making use of affiliate networks like coupon websites, review websites, bloggers and much
more.

Flipkart started as a book selling website, but later went on to operate as a complete online retail site.
The company started with an inventory based model, but it was in 2013 that it moved to a market
place model, which is how even Amazon.com operates. Flipkart charges a commission of 5-10% on
every sale through its site. The commission charged through luxury items such as electronics is
higher than that of generic items. Flipkart has constantly been trying to reduce the percentage of
commission that it charges to its suppliers, so as to have more number of suppliers. It has also
partnered with brands like Xiaomi who spend on such sites as a strategy to promote their products.
Flipkart also charges third party sellers, where, when a customer searches for some kind of product,
the product relevant to that category or that particular brand will be amongst the first searches to be
shown. This is another way companies promote their products. A listing fee for the sellers is
additional revenue for the company, along with the convenience fee that is usually to be paid by the
customers, which includes the wrapping up of the product as a gift or even the fee for faster delivery.

Payment gateways is another way Flipkart earns its revenue. It is usually the transaction processing
charges which will differ based on the way payment is done. For example, if a payment is made
through debit card and net banking, the charges are found to be lowest (around 0.75%-1.00% of the
transaction amount). Similarly there is percentage charge levied on even credit cards and American
Express cards too. Thus, depending upon which mode the customer selects to make the payment, the
company gets its transaction revenue, making it another way to earn penny for the company

As per the progressive business model offered by Flipkart, the percentage of the commission
charged by Flipkart from various sellers on its online portal might vary from the type of products and
the type of sales. It usually ranges from around 5-20 percent based on the type of services availed
by the sellers. In the business model, Flipkart has also introduced the various other forms of income
like the marketplace, charging the listing and convenience fees, logistics from the consumers, digital
media like the co-advertised products, Myntra – another E-commerce website owned by Flipkart and
much more.

India's largest online marketplace Flipkart wants to be an 'everything app' that customers can tap into for ordering
food, hailing a cab, planning a vacation, or buying daily essentials.

The company has begun talks to partner with food, cab and travel aggregators for its app-of-apps that it plans to
rollout by the end of this year. A mega app of this sort, Flipkart expects, will allow it to boost customer loyalty while
also monetising the huge volumes of customer data it has access to a ..

Read more at:

//economictimes.indiatimes.com/articleshow/59119116.cms?utm_source=contentofinterest&utm_medium=text&utm_
campaign=cppst
India's largest online marketplace Flipkart wants to be an 'everything app' that customers can tap into for ordering
food, hailing a cab, planning a vacation, or buying daily essentials.

The company has begun talks to partner with food, cab and travel aggregators for its app-of-apps that it plans to
rollout by the end of this year. A mega app of this sort, Flipkart expects, will allow it to boost customer loyalty while
also monetising the huge volumes of customer data it has access to a ..

Read more at:

//economictimes.indiatimes.com/articleshow/59119116.cms?utm_source=contentofinterest&utm_medium=text&utm_
campaign=cppst

Flipkart, which generates the third highest revenue from online ads in India, plans to
double its annualized sales from digital advertising to roughly $200 million by March,
aiming to close the considerable gap with market leaders Google Inc. and Facebook
Inc. The annualized revenue implies that Flipkart will generate sales of $16-17 million
in March, a top company executive said.
To achieve that, Flipkart plans to woo advertisers from sectors such as banking and
financial services, areas where the online retailer does not have a presence, said
Prakash Sikaria, senior director and head of monetization and growth at Flipkart.
“Over the next few months, we will be forging some interesting partnerships with a
number of brands from different sectors, as we start opening up our platform," said
Sikaria.
Flipkart’s ad business reached $100 million in annualized revenue for the year ended
March 2018, he said, adding that the company would double down on the video ads
space, the fastest growing sector in the overall digital ads business, which will drive
growth in the near future.
With a base of nearly 100 million registered users, a majority of whom shop on
Flipkart’s mobile app, Flipkart is betting that digital ads can become a massive
business in the future.