Flipkart

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Flipkart
Company typePrivate
IndustryInternet
Founded5 September 2007
FounderSachin Bansal, Binny Bansal
HeadquartersBangalore, Karnataka, India
Area served
India
Key people
Sachin Bansal
Binny Bansal
Amod Malviya
ServicesE-commerce
(Online shopping)
RevenueIncrease US$ 1 billion (gross merchandise 2013-14)[1]
Number of employees
15,000 (2014)[2]
SubsidiariesMyntra
WebsiteFlipkart.com

Flipkart is an Indian E-Commerce company established in 2007 by Sachin Bansal and Binny Bansal. It operates exclusively in India, with headquarters at Bangalore, Karnataka. Flipkart has launched its own product range under the name "DigiFlip" with products including tablets, USBs, and laptop bags. Flipkart has also launched its own range of personal healthcare and home appliances under the brand "Citron".[3][4][5]

In May 2014, Flipkart received $210 million from DST Global and in July it raised $1 billion led by existing investors Tiger Global and South Africa's media group Naspers.

History

Flipkart (Company) was founded in 2007 by Sachin Bansal and Binny Bansal, both alumni of the Indian Institute of Technology Delhi. They had been working for Amazon.com previously. The business was formally incorporated as a company in October 2008 as Flipkart Online Services Pvt. Ltd.[6] During its initial years, Flipkart focused only on books, and soon as it expanded, it started offering other products like electronic goods, air conditioners, air coolers, stationery supplies and life style products and e-books. The first product sold by them was the book Leaving Microsoft To Change The World, bought by VVK Chandra from Andhra Pradesh.[7][8][9] Flipkart now employs more than 15000 people.[10] Flipkart allows payment methods such as cash on delivery, credit or debit card transactions, net banking, e-gift voucher and card swipe on delivery.[11]

Acquisitions

  • 2010: WeRead, a social book discovery tool.[12]
  • 2011: Mime360, a digital content platform company.[13]
  • 2011: Chakpak.com, a Bollywood news site that offers updates, news, photos and videos. Flipkart acquired the rights to Chakpak's digital catalogue which includes 40,000 filmographies, 10,000 movies and close to 50,000 ratings. Flipkart has categorically said that it will not be involved with the original site and will not use the brand name.[14]
  • 2012: Letsbuy.com, an Indian e-retailer in electronics. Flipkart has bought the company for an estimated US$25 million.[15][16] Letsbuy.com was closed down and all traffic to Letsbuy has been diverted to Flipkart.[17]
  • 2014: Acquired Myntra.com in an estimated INR 2,000 crore deal.[18]

Finance

Initially, the founders had spent ₹ 400,000 only for making website to set up the business.[19] Flipkart has later raised funding from venture capital funds Accel India (US$1 million in 2009)[20][21][22] and Tiger Global (US$10 million in 2010 and US$20 million in June 2011).[23][24][25] On 24 August 2012, Flipkart announced the completion of its 4th round of $150 million funding from MIH (part of Naspers Group) and ICONIQ Capital.[26] The company announced, on 10 July 2013, that it has raised an additional $200 million from existing investors including Tiger Global, Naspers, Accel Partners and Iconiq Capital.[27]

Flipkart's reported sales were ₹ 40 million in FY 2008–2009,[28][29] ₹ 200 million in FY 2009–2010[30] and ₹ 750 million for FY 2010–2011.[31] In FY 2011–2012, Flipkart is set to cross the ₹ 5 billion (US$100 million) mark as Internet usage in the country increases and people get accustomed to making purchases online.[32] Flipkart projects its sales to reach ₹ 10 billion by year 2014. On average, Flipkart sells nearly 10 products per minute[33] and is aiming at generating a revenue of ₹ 50 billion (US$0.81 billion) by 2015.[34]

On November 2012, Flipkart became one of the companies being probed for alleged violations of FDI regulations of the Foreign Exchange Management Act, 1999[35][36]

Flipkart reported a loss of ₹ 281 crore for the FY 2012-13.[37] In July 2013, Flipkart raised USD 160 million from private equity investors.[38]

In October 2013, it was reported that Flipkart had raised an additional $160 million from new investors Dragoneer Investment Group, Morgan Stanley Wealth Management, Sofina SA and Vulcan Inc. with participation from existing investor Tiger Global.[39][40][41]

On 26 May 2014, Flipkart announced that it has raised $210 million from Yuri Milner’s DST Global and its existing investors Tiger Global, Naspers and Iconiq Capital.[42]

In early July 2014, it was also highly speculated that Flipkart was in negotiations to raise at least $500 million, for a likely listing in the US for 2016.[43]

On 29 July 2014, Flipkart announced that it raised $1 billion[44] from Tiger Global Management LLC, Accel Partners, and Morgan Stanley Investment Management and a new investor Singapore sovereign-wealth fund GIC.[45]

On 6 October 2014, Flipkart sold products worth INR 650Crore in 10 hours in a special one-day event - "The Big Billion Day", claiming they had created e-commerce history, but their hard-won reputation for good customer service suffered because of technical problems, and angry reactions on social media from buyers disappointed with the pricing and availability of products.[46][47][48] It claimed to sell a whopping 5 lakh mobile handsets, five-lakh clothes and shoes and 25,000 television sets within hours of opening its discounted sale at 8 AM.[49] In December 2014, After it received $700 million from another funding, Flipkart had a market cap of $11 billion or Rs.66000 crore.[50]

On 20th December, 2014, Flipkart announced filing application with Singapore based companies' regulator ACRA to become a public company after raising USD 700 million for long term strategic investments in India following which its number of investors exceeded 50. The USD 700 million fund raised by Flipkart added new investors - Baillie Gifford, Greenoaks Capital, Steadview Capital, T. Rowe Price Associates and Qatar Investment Authority - on company's board.Its existing investors DST Global, GIC, ICONIQ Capital and Tiger Global also participated in this latest financing round. [51]

Flyte Digital Music Store

In October and November 2011, Flipkart acquired the websites Mime360.com[13] and Chakpak.com.[14] Later, in February 2012, the company revealed its new Flyte Digital Music Store.[52] Flyte, a legal music download service in the vein of iTunes and Amazon.com, offered DRM-free MP3 downloads. But it was shut down on 17 June 2013 as paid song downloads did not get popular in India due to the advent of free music streaming sites.[53][54]

Exclusive Product Launches

Motorola Mobility, previously owned by Google but then sold to Lenovo, in an exclusive tie up with Flipkart launched its budget smartphone Moto G in India on 5 February 2014.[55][56] This triggered an overwhelming response from online shoppers and more than 20,000 units were sold within hours of launch on Flipkart. After the Moto G successful debut launch, Flipkart was looking for a long term tie up with Motorola Mobility.[57] The Moto G success story, led to an another exclusive tie up between Flipkart & Motorola Mobility, who launched their flagship Android smartphone, the Moto X on 19 March 2014.[58][59] After Moto G and Moto X, Flipkart invited the Moto E, the newest member of Moto family which is even cheaper than Moto G on 13 May 2014.[60] The sale of high-end smartphone Xiaomi Mi3 produced by Xiaomi Tech was launched in India on an exclusive tie-up with Flipkart. The first batch was sold out within 39 minutes[61] on 22 July 2014, the second in 5 seconds[62] on 29 July 2014. The sale was proceeded on pre-registration mode where more than 150 000 buyers booked for the 5 August 2014 sale. This got sold off in less than 2 seconds.[63] Following this Xiaomi Tech decided to sell 20,000 pieces in the next sale scheduled for 12 August 2014.[64] On September 2, 2014 Flipkart held a flash sale of the budget Android smartphone the Xiaomi Redmi 1S which was launched in India in July 2014. 40, 000 units priced at Rs 5999 each were sold within seconds.[65] In the second round of Xiaomi Redmi 1S sale held on Sept 9, 2014, 40,000 units were sold within a span of 4.5 seconds, slightly longer than the first sale, which lasted just 4.3 seconds.[66] Third round of Redmi 1S sale held on Sept 16, 2014 with again 40,000 units sold in fastest of all 3.4 seconds.[67] In the 4th round of sale of Redmi 1S held on Sept 23, 2014, Flipkart put more units this time, 60,000 units go out of stock in 5.2 seconds.[68] In the latest Flash sale held on Sept 30, 2014, once again 60,000 units Go out of stock in 13.9 seconds.[69] Redmi Note in India exclusively through Flipkart. The first flash sale of 50,000 Redmi Note devices held on December 2, 2014 and all the devices sold out in mere 6 seconds, just like all the earlier flash sales of Xiaomi held at Flipkart.[70]

In-house Products

  • In July 2014 Flipkart launched its own set of tablet, mobile phones & Phablet. The first among these series of tablet phones was Digiflip Pro XT 712 Tablet.
  • In July 2014 Flipkart launched its first networking router, under its own brand name named DigiFlip WR001 300 Mbit/s Wireless N Router.
  • In September 2014 Flipkart launched its in-house home appliances and personal healthcare brand Citron. The label includes a wide range of cooking utilities and grooming products.

Criticism

On 6 October 2014 Flipkart launched Big Billion Day with intention to increase the popularity by targeting billion sales in 1 day. This even though helped Flipkart achieve the target led to public outcry and widespread criticism across consumers, competitors and partners heavily damaging its reputation.

Many users couldn't place the order because the servers were not capable enough to take the load and was giving random errors to users which led to frustration among customers.[71] Many users who placed orders got email saying that the order got cancelled.[72] Most of the products were sold for price less than cost price and was accused of killing the competition. Major competitors filed complaints against Flipkart to commerce ministry claiming that selling products for less than cost price is against the commerce policy of the country.[73] Ministry said that they will form new trade rules for e retail after this incident.[74][75]

On 13 September 2014 a Flipkart delivery boy molested a house maid in Hyderabad.[76] The house maid's employer has been fighting against Flipkart for justice on this issue, and also for making offline delivery services safe.[77]

Awards and recognition

  • Co-Founder of Flipkart Sachin Bansal, got Entrepreneur of the Year Award 2012-2013 from Economic Times, leading Indian Economic Daily[78]
  • Flipkart.com was awarded Young Turk of the Year at CNBC TV 18's 'India Business Leader Awards 2012' (IBLA).[79]
  • Flipkart.com- got Nominated for IndiaMART Leaders of Tomorrow Awards 2011.[80]

See also

References

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Goyal, Anuradha (2014). The Mouse Charmers - Digital Pioneers of India, Random House India. p. 35. ISBN 978 81 8400 492 2.

External links


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