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E-commerce is the best place to buy products. Buying products online can save a lot of your money. Online shopping becomes a trend in this present world.
E-commerce is booming very quickly. According to the estimation, E-commerce will reach a $200 Billion market value in 2027.
But the same craze and online users were merely a number back in the 2000s.E-commerce sites were trying very hard to drive consumers towards online shopping.
While there was no proper penetration internet back then. Even smartphone users were fever. Starting an e-commerce business was very difficult and impossible.
But in this blog, we talk about India’s e-commerce giant Flipkart. How it overcome the hurdles and become the strongest contender. Even Flipkart success story
We will also discuss how their founders lost control over their own companies.
Flipkart is India’s largest e-commerce company. The company found way back in 2008. The founders of Flipkart were Sachin Bansal and Binny Bansal. Both are the alumnus from Delhi IIT.
Flipkart’s headquarter is in Bangalore. Now the company values at $40 billion in 2021. Besides, the majority of the stakes of Flipkart are with Walmart an American company (82%).
Moreover, Sachin Bansal and Binny Bansal are not part of the company anymore. Presently, the CEO of Flipkart is Kalyan Krishna Murthy.
Flipkart success story
Flipkart was a very early player in the e-commerce industry in India in 2008. The credit for its growth goes for its young and very passionate entrepreneurs Sachin Bansal and Binny Bansal.
Both of the founders were studying in IIT Delhi. But they never met each other in their early college days. Interestingly, they were in the same stream, Computer Science.
But in the final year, they met each other and become good friends. Their graduation was completed in the year 2005.
Then both Sachin and Binny Bansal were working in different companies. But they were in touch with phone calls.
Binny Bansal was working in Sarnoff Corporation. While Sachin Bansal was working at Amazon and always insisting Binny join Amazon.
Finally, in 2007, both were working in Amazon. While working they were exchanging their thought and ideas. Both were in the idea to start an e-commerce company in India.
Because they were fed up working at Amazon. Always had an intent to start something of their own. These two founders the pillar for the Filpkart success story.
Flipkart success story: foundation
Finally, Sachin and Binny Bansal decide to quit their jobs on Amazon. Then they had the desire to start an e-commerce company.
In 2007 they found Flipkart, but initially, it was not an e-commerce website. Instead, it was a product comparing website.
But the idea did not work for a year. So they pivoted to an e-commerce website in 2008. Both Sachin and Binny Bansal invest 4 lakh as an initial investment.
The Initial Flipkart office was 2 BHK apartments in Koramangala, Bangalore.
In 2008, Flipkart was selling books online. The company did not have any warehouse for the products. So when the order comes they contact the library or books dealers for purchase.
Flipkart’s first customer was Mr. Chandra. He made an order for a book which he could not find in nearby stores. Sachin and Binny were very happy to receive their first order.
Then both founders found it very difficult to find the book. They went to various shops but couldn’t find one.
Finally, they got the book and completes the first order. Mr. Chandra was very happy and gave valuable reviews on their site.
e-commerce site Flipkart success story rise
Gradually, Flipkart starts to grow and the orders were also increasing. Many people find it cool to order books online. Flipkart gave the best customer experience with their speedy delivery and easy replacements.
To build a big company founder’s vision should be very clear. Sachin Bansal had a great idea and vision. Whereas, Binny Bansal executes the idea according to Sachin Bansal’s guidance. These all factors made Flipkart success story
flipkart First fundings
Flipkart becomes profitable in the coming years. Till 2009 the company sold the book worth $40 million. This milestone made founders very happy.
Then the Flipkart company become famous for its services. The company made a severe impact in the e-commerce industry. Now companies are ready to make their investment in the company.
In 2009, Accel invested $ 1 million in Flipkart. This funding made them expand their services. At the end of 2009, Flipkart had 3 offices with 150 employees.
Growth and expansion of Flipkart success story
Flipkart became a valuable e-commerce company in India. Users were very satisfied with their services.
In 2010 Tiger Global invested $ 10 million in Flipkart. In the same year, the company also went to launch sales of phones.
Flipkart came with up the best ideas in the coming years. Initially, the company accepts cash on delivery (COD). The company understood its customers very well and found online transactions a bit inconvenient mode for them.
Cash on delivery made the company revenue double. Soon it also launches its sales of electronics goods like tablets, DVDs, laptops, and many more.
Flipkart’s sales rose to $ 750 million in FY11. on the other hand, Lots of competitors like Amazon and Snapdeal step into the market.
To give tough competition to other companies and to create an omnichannel platform, Flipkart starts to acquire companies.
- Myntra: Flipkart acquires Myntra with $280 million(2000 cores) in 2014. It is a fashion e-commerce company. The acquisition made the e-commerce giant stronger in the clothing segment. Myntra was founded by Mukesh Bansal in 2007.
- Jabong: It is another fashion and lifestyle e-commerce company. The company had attractive clothing to the youngsters and also had domination in trendy clothing fit. So every youth just had a craze to buy clothes in Jabong. As a result of its popularity, Flipkart acquires Jabong in 2020 for $70 million. Jabong was founded by Praveen Sinha, Lakshmi, Arun, and Manu Kumar.
- Phone pe: India’s largest digital payment platform Phon pe was was acquired by Flipkart in 2016. This acquisition made the company’s digital payment vital and independent.
- Mime360.com: It is a digital distribution platform. Flipkart acquired Mime360.com in 2011.
- Arvind Fashions: Flipkart made an investment worth $ 35 million in Arvind Fashions Lmt. So the company can get high quality of clothes from this company.
In the coming years, the company made some wrong decisions which made the company on the edge of declination.
In 2013 Flipkart made it available only on apps. So users want to download the app to use it.
But this did not come up effectively and the sales come down severely. Finally, Flipkart made it available both on websites and apps.
Flyte a music platform made its mark in 2012. It is another subsidiary of e-commerce giant. But it could not capture the users and finally shuts its operation in the FY13.
PAYZIPPY a digital payment platform made it easy for digital payment in Flipkart shopping. But this method also shut down in 2013.
These were some of the failures of the company and also incurred losses heavily. But still, it overcomes all the failures and the valuation of the company reaches $20 billion in 2018 with an investment of Walmart. Flipkart success story had dark days in its journey.
Walmart Acquisition of Flipkart
Walmart an American hypermarket company with more than 12,000 stores in 128 countries. This company made a huge investment of $ 16 billion in Flipkart, acquiring 77% of the stake in 2018.
This was one of the costliest acquisitions in India. Walmart intervention was a threat to the foundation of the company. Because now Walmart trying to create supremacy in the company.
Now any new decision requires Walmart approval. Sachin Bansal, founder of Flipkart had a lot of issues with Walmart.
Before the Walmart acquisition, Sachin Bansal was the primary decision-maker. But now Walmart company always rejects Sachin’s ideas and made them tedious to implement.
Subsequently, Sachin Bansal found discomfort and annoyance with Walmart supremacy. So he sold 5.5% of the stakes for $1 billion and took an exit in 2018.
Binny Bansal continued his work in Flipkart. But he was not far from the resignation.
In November 2018, there was an allegation against Binny Bansal from a women employee. She reported a harassment case against Binny Bansal.
Finally, due to humiliation and speculation Binny Bansal made resignation in FY18.
Founders of Flipkart Sachin and Binny Bansal were out of their own company. Some speculation being made the Walmart was framing these two founders to create a monopoly over Flipkart.
Also read: Success story of Jack Ma founder of Alibaba
Why Walmart acquired
Walmart has a huge offline chain of hypermarkets. It has its monopoly in offline stores in the US.
But Walmart is trying to build its e-commerce company. Even Walmart build Dotjet an e-commerce company but it did not give much revenue,
The main intention of Walmart to start e-commerce was to give tough competition to Amazon.
Finally, Walmart found a Flipkart which was giving a tough fight to Amazon in India. Moreover, Flipkart dominating Amazon in sales and Market share.
So, Walmart decides to make an investment in Flipkart and at last, took over the company in 2018.
In this way, Flipkart made a huge impact in India. Sachin and Binny Bansal build an empire in the e-commerce industry. Now Flipkart is holding a large market share of about 31.9% in India. This shows founders are the heroes of Flipkart success story