Flipkart: A 2007 Miracle in Indian E-commerce Industry

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Innovation brings with itself a new set of challenges. The E-Retailing form of market was fairly something unheard of to the Indian consumer in 2007 till Flipkart came into picture.

Sachin Bansal and Binny Bansal: Founder of Indian E-commerce — Flipkart
Sachin Bansal and Binny Bansal: Founder of Indian E-commerce — Flipkart

Sachin Bansal and Binny Bansal, students of IIT Delhi and former employees of Amazon, joined hands and formed an Indian e-commerce company called Flipkart in the year 2007 with a capital investment of just ₹4,00,000.

The company which is headquartered in Bangalore, India and registered in Singapore; has revolutionized Indian e-commerce industry.

Initially, Flipkart sold only books, but later expanded into other product categories such as Lifestyle products, Consumer electronics, Fashion, Toys, etc.

 Primary categories of products sold at Flipkart are:

  • Books
  • Mobiles & Accessories
  • Computers
  • Home and Kitchen
  • Personal and Health Care
  • Gaming
  • Watches and Fragrances
  • Music and Movies
  • Stationery

Challenges and Competition

Challenges and Competition
Challenges and Competition: Flipkart, an Indian E-commerce site

It was not an easy sailing for Flipkart, an Indian E-commerce site. It had a direct competition with the Amazon’s Indian subsidiary and also with the domestic rival Snapdeal.

As per the 2017 reports, Flipkart was having a market share of around 39.5% in the Indian e-commerce industry. The company was dominating in the sale of apparel after acquiring Myntra and Jabong. It also owned subsidiaries Phonpe — a mobile payments service system.

As per the 2017 financial reports of the company, the total revenues of the company were around US $2.9 billion.

The company, however, faced challenges of increased market competition, changes in the trends of e-commerce, changing demands of the customers, and also changes in the different product ranges offered by the organization.

The major challenges faced in the organization were related to market competition, sales issues, workplace issues, and excess working hours for the employees, aggressive approach of the organization, non-flexible organization structure, and inappropriate ways to address the market challenges. The top-level management failed to address the market challenges in a given environment.

Target Segment

Target Segment
Target Segment: Flipkart, an Indian E-commerce site

The company is dealing into selling of a range of items through online mode. It is targeting those people who prefer to buy products through online shopping. The major target groups of the company include middle and upper-middle income groups who prefer to spend online.

The development of the organization took place not only through product expansion but also by focusing on developing in-house brands that caught attention of several customers in a given nation. Also, the company has developed strategic joint-ventures with many of the well-known brands and is thereby providing apparels at low costs.

Cash on Delivery (COD)

Cash on Delivery
Cash on Delivery: Flipkart, an Indian E-commerce site

Cash on delivery (COD) is a type of transaction in which the buyer makes payment for a good at the time of delivery. It can also be called as ‘collect on delivery’ since delivery may allow for cash, check, or electronic payment.

Flipkart, an Indian e-commerce site, was among the first major e-commerce players in India to introduce the cash on delivery option for its customers in 2010.

Flipkart Big Billion Day

Flipkart Big Billion Day
Flipkart Big Billion Day: Flipkart, an Indian E-commerce site

The concept of Big Billion Day by Flipkart during the Diwali season boosts the company sales like never before. As per an estimate, the company sells goods worth US$ 100 million in less than twelve hours during this sale. However, it hasn’t been without its fair share of criticism and social media controversies over price bumps, shortage of stocks, technical glitch and delayed delivery.

Flipkart’s Funding Timeline

Funding Timeline
Funding Timeline: Flipkart, an Indian E-commerce site

2010–11: The company raised $20 million from Tiger Global and began talks with American growth equity firm General Atlantic.

2012: Flipkart announced a $150 million funding round led by South Africa-based tech majors named Naspers. By this time, Flipkart had a valuation of $1 billion, thus becoming a part of the Unicorn startup club!

2013: The company again raised a sum of $200 million from its existing investors. Another $160 million was raised from Sofina, Morgan Stanley, Dragoneer and Vulcan capital. In this period, Flipkart had an estimated valuation of nearly $1.6 billion.

2014: Flipkart acquired Myntra for nearly $280 million. It then raised $210 million from DST Global. The valuation was recorded at $2.6 billion.

2014: The same year Flipkart witnessed a $1 billion funding round from GIC Singapore. As a result, the company valuation shot up to $7 billion within 3 months.

2014: In another round, the company raised as many as $700 million from hedge funds such as Steadview Capital, Greenoaks, sovereign wealth fund Qatar Investment Authority, T Rowe Price. The valuation at this point stood at an enormous $11 billion.

2015: Flipkart reached a landmark valuation at $15.5 billion. It again raised roughly $700 million from its investors.

2016: Flipkart would like to forget this year as the company witnessed the first big markdown by a Mutual Fund (Morgan Stanley). The valuation came down to $11 billion.

2016: Flipkart kept receiving continuous markdowns by a number of mutual fund investors such as T Rowe Price, Vanguard and Fidelity.

2016: A Morgan Stanley Mutual Fund made a significant cut to the value of its Flipkart shares. As a result, the valuation witnessed a further drop to $5.6 billion.

2018: Walmart acquired 77% stake in Flipkart for $16 billion.

Flipkart Failures

Flipkart Failures
Flipkart Failures: Flipkart, an Indian E-commerce site

After you have reached the top, the only way forward is to come down. Remember that failures are meant for growth. If a person or a company does not embrace its failures as much as its successes, they are bound for long-term loss.

Flipkart was not an exception. It too had its fair share of failures, which are listed below:

1. Flyte

Flipkart tried to get into the online music streaming business in 2011. For this purpose, they acquired a digital content platform named Mime360. Flyte was launched in the year 2012; however, it faced tough competition from existing portals which were offering free services, and the problem posed by piracy. Flyte had to shut down in 2013.

2. PayZippy

Before Flipkart acquired a UPI called PhonePe (a Unified Payments Interface-based mobile payment digital wallet service), it tried experimenting with a payment gateway named PayZippy in 2013. The project failed miserably as the payment gateway was unable to bring merchants on-board. It was shut in 2014.

3. Going App-only for mobile users

In order to push mobile users to download their apps, Flipkart blocked them from accessing their website and prompted them to download the app. The move apparently backfired and Flipkart had to reinstate the mobile website.

Walmart acquires Flipkart

Global retail giant, Walmart won a bidding war against Amazon and paid US$16 billion to buy a majority stake in Flipkart, an Indian e-commerce site. This acquisition was the world’s largest e-commerce takeover. Walmart’s shares tanked badly on the New York Stock Exchange fearing the former’s acquisition of a loss-making entity. Sachin Bansal also left the company soon after the acquisition. Now, the Flipkart employees, including the top management had to report to CEO of Walmart e-commerce US, Marc Lore. 

On August 18, 2018, the acquisition finally saw the light of the day. Walmart also provided equity funding worth US$2 billion to Flipkart.

Here’s what The Economic Times has to say about the acquisition. And this is what BBC News thinks of Walmart acquiring Flipkart.

Year 2020 – Pandemic Outbreak

Major e-retailers like Flipkart and Amazon halted their operations and services on March 25, 2020 in the wake of coronavirus pandemic outbreak. Later, Flipkart partnered with Uber India to deliver everyday essential items in metro cities like Mumbai, Delhi and Bengaluru amidst COVID-19 national lockdown. People of India reaped benefits of this partnership as they got the support in the form of essential deliveries right at their door-step while being staying safe at home.


Flipkart, an Indian E-commerce site, has carved a niche for itself in terms of market share, goodwill and popularity in the online market. The company never lost faith in its investors and customers. Despite tough competition from arch rival—Amazon, the company held its ground. It also proved its mettle in-spite-of many major changes in leadership in the past few years.

Sachin Vishwakarma

Sachin Vishwakarma

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