It is difficult to believe that a single tiny business can revolutionize our shopping habits. However, Flipkart has done just that. In 2007, the majority of Indians still conducted their buying offline, and e-commerce was still viewed as a separate industry. The world was being taken over by the Internet, and Steve Jobs had just introduced the first iPhone, which was poised to upend the whole smartphone market in the years to come.
Sachin and Binny Bansal, two Indian software engineers, were aware of how technology was evolving and saw the possibilities in e-commerce. Even though there were only 50 million internet users in India at the time, they were aware that more Indians would eventually become internet-connected when smartphones entered the market. They sought to take advantage of this opportunity to create an online marketplace that may elevate the buying experience in India.
In the present era, India boasts of more than 570 million internet users, and the proportion of people making purchases online has also experienced a notable surge. From a two-person effort to create the most reliable online shopping platform in India, Flipkart has grown to become the country’s top e-commerce platform, serving over 100 million users with a catalog of 80 million products in 80 categories.
This Verzeo startup stories essay will look at the history of Flipkart and how Sachin and Binny prepared to start from scratch and create India’s e-commerce sector.
How did Flipkart’s founders get together?
Before we begin, you should be aware that there was a real possibility Flipkart would not have happened if Sachin and Binny had performed better academically. Fortunately, they weren’t.
Sachin and Binny were studying for their B.Tech at IIT Delhi back in 2005. Because Sachin and Binny didn’t finish their projects on time, they were trapped in college for the summer break while the majority of students had gone home. The two first had a conversation while working on their projects in the same lab. In addition, while he was unaware of it at the time, Binny met both Trisha, his lifelong companion, and Sachin at the same lab, making it perhaps the most productive summer of his life.
But Sachin and Binny never really grew close. Together with two other boys from their college, they moved to Bangalore for their jobs after graduating. At the time, Binny was employed by Sarnoff, and Sachin was working for a company named Techspan. In 2006, Sachin began working for Amazon, and later in 2007, Binny joined him there.
Origins of Flipkart
The two soon grew bored with their work at Amazon and started to tinker with ideas. They launched a comparison shopping website since they were interested in e-commerce. They intended to create a website that would enable consumers to compare product prices across several websites and determine which offers offer the most value for their money.
They quickly came to the conclusion that their online website experience was terrible when they began browsing several e-commerce websites. They didn’t anticipate others to try to do the same thing, and they were aware that they might never buy anything from those badly constructed websites.
As they put their idea for a comparison-shopping website on hold, they began to consider how they may create a far better website and give their users a better shopping experience. The two were sure that since they were both techies, they would get along.
In September of 2007, the two quickly left Amazon, combined their 4 lakh rupees, and launched Flipkart. Instead of listing, shipping, and finding distributors for other categories like electronics or apparel, which may be very expensive, they had chosen to sell books on their site.
The voyage of Flipkart commences.
When they began looking for suppliers to list books on their platform, they quickly admitted that it had not been as simple as they had initially believed. The majority of vendors were quite skeptical and didn’t believe in their business plan since people still didn’t understand the internet and online business wasn’t very common.
Still, the two persisted and succeeded in getting some vendors to demand a chance with them. In October 2007, after persuading merchants, they established their website.
A young technician named VVK Chandra, who lived in Mahbubnagar, Telangana (then the state of Andhra Pradesh), placed them their first order at the end of October. When their vendors informed them that the book was not available, their excitement about their first order quickly turned to anxiety. Following a frantic search throughout Bangalore, the pair succeeded in obtaining the book and completing their first order.
With that order, Flipkart’s operations were formally launched. The founders of the company sought to prioritize their customers’ needs and employ technology to give them a better online shopping experience, as there weren’t many quality e-commerce websites in India.
They demonstrated their dedication to their clients by making an effort to deliver their first order, which would benefit them in the long run. As a two-person business, they handled every aspect of website development and book delivery. In just 2007 alone, they were able to deliver 20 cargoes.
The firm achieved operational profitability in just six months, and in 2008, they moved into a two-bedroom apartment in Kormangala, which they planned to use as their workplace for the ensuing years. With time, their business grew rapidly, and by 2009’s end, Flipkart had sold books valued at ₹4 crores.
Bookworms found Flipkart to be successful, and investors were making good returns. 2009 saw Flipkart receive a $1 million cash investment from the well-known investment firm Accel Partners. The startup already employed over 150 people and operated three locations around India by the end of 2009.
Sachin and Binny have not only developed their firm at a remarkable rate in a short amount of time, but they have also grown as individuals and as entrepreneurs. Binny, a reserved person, was referred to as the operations people, while Sachin, who was skilled at thinking large, was the driving force behind Flipkart’s ideas and vision. They had discovered a wonderful mate who enhanced each other’s abilities in the other. Binny turned Sachin’s dreams into reality.
India’s e-commerce remained a niche industry, and a sizable portion of the populace remained reluctant to make purchases online. Nonetheless, Flipkart maintained its development by establishing a reputation for trust with its devoted clientele and fostering confidence through round-the-clock customer service. However, things were soon rapidly shifting.
In 2010, Tiger Global joined as a new partner, investing US$10 million in its maiden venture.
The firm was allowed to move forward since Flipkart was already the preferred channel for Indian book lovers. Flipkart was able to enter the electronics market with the help of new investors and partners. Thus, in 2010, they began to sell mobile phones.
However, as the months passed, cellphone sales stagnated while book sales kept rising. Customers were clearly willing to pay small amounts of money, like Rs 500, online, but they were less likely to part with large sums of money, like Rs 10,000 or Rs 15,000, for mobile phones without first handling and feeling the devices—something that they could easily get in-store.
Flipkart still had enough notoriety to earn that level of confidence from its clientele. The founders were pushed to adopt new perspectives by this issue. and that they were prepared to devise the brilliant concept of implementing Cash on Delivery. One of the first online retailers to offer its consumers the option of paying with cash on delivery was Flipkart.
The founders doubled down on their idea by adopting a no-questions-asked return policy and a replacement policy since they were adamant about gaining the trust of Indian consumers. They were prepared to forgo expansion in order to satisfy clients.
These days, all Indian e-commerce websites include these three capabilities, but in 2010 or 2011, they were truly unique. Consumers cherished these choices because they gave them the freedom to pay and make purchases at their own pace. Indians who had previously been afraid to shop online were starting to warm up to the new concept of ordering goods online and having them delivered straight to their homes thanks to Sachin and Binny.
Similar to in-store buying, they may choose to receive a full refund or just return the item if they weren’t happy with it. Flipkart’s sales started growing even faster than they had ever climbed because of this game-changing event. Flipkart’s revenues increased from just ₹4 crores during the 2009 fiscal year to ₹75 crores by the end of the 2011 fiscal year, an increase of 18.75 times over the previous occurrence.
Flipkart quickly became unstoppable; they had defied the dominance of traditional brick-and-mortar retailers and cracked the code for Indian shoppers. They were growing into new areas, and investors were throwing money at them. Flipkart was already a unicorn by 2012—the second in India after InMobi.
The Cowboy Ventures founder Aileen Lee first used the word “Unicorn” in 2013, which is when it started to gain traction. In the ensuing years, Flipkart emerged as a company that other entrepreneurs would chase, and Sachin and Binny came to represent the expanding startup scene in India.
battling with Amazon
In India, Flipkart dominated the e-commerce market without a doubt. Many clients were able to make purchases online thanks in large part to the company. But when another massive e-commerce player, Amazon, entered the market in 2013, everything was about to change.
Flipkart has to compete with Snapdeal, another Indian e-commerce upstart, in addition to Amazon. Even though Snapdeal was still smaller than Flipkart, Amazon was becoming a formidable competitor. It turned into a David vs. Goliath fight.
This didn’t stop Sachin and Binny because they were more familiar with their clients and had established a trustworthy brand thanks to their technological platform, which was developed via years of client feedback. Investors who helped Flipkart raise almost $2 billion in 2014 alone voiced their trust. Tiger Global, one of their original investors, and Accel kept believing in the business.
In order to enter the fashion e-commerce space, Flipkart purchased Myntra in 2014 with a $2 billion investment. In order to grow quickly in the online fashion market, Flipkart later in 2016 purchased Jabong, another fashion e-commerce startup. The creators discovered they were in a better position to acquire two of these, thus this turned out to be a wise decision.
Flipkart no longer enjoyed the luxury of time that it did in its early days due to Amazon’s competition in the Indian market. With more than 60% of the market, Flipkart is now a trendsetter in the fashion e-commerce sector as a result of that acquisition.
Flipkart had an advantage over Amazon due to their ability to capture the Indian market, as well as the founders’ and team’s experience building a company from the ground up. This allowed Flipkart to stay competitive and outperform Amazon sooner.
With a market share of 31.9% as of 2018, Flipkart continues to be the top online retailer in India, trailing only Amazon’s 31.2% share. Flipkart’s overall market share rises to 38.3% when Myntra and Jabong sales are taken into account.
The Failures of Flipkart
Even with Flipkart’s enormous success, the company’s founders still had to overcome several obstacles and experience some setbacks. They were able to quickly experiment and adapt in order to scale, which helped them transform Flipkart into the E-commerce behemoth that it is today.
Flipkart attempted to enter the online music streaming market by acquiring the digital content platform Mime360 in 2011 and launching Flyte, a music streaming service, in 2012. At the time, music piracy was a major problem, and new torrent websites giving free music were popping up all the time. With so many websites offering free music downloads, Flipkart’s most recent endeavor was bound to fail. Flyte had to be shut down by Flipkart in 2013.
In 2013, the corporation attempted to introduce its PayZippy payment gateway before it was successful with digital payments through PhonePe. 2014 saw the closure of its payment gateway due to inability to enroll merchants.
Then there was Flipkart’s app-only trial, in which the business advised mobile consumers to download its app instead of accessing its website. Flipkart had to relaunch its website in order to give customers the option to use both mobile websites and applications, even though the majority of their traffic came from mobile users.
Acquisition of Flipkart by Walmart
The founders of Flipkart persevered in focusing on what their customers needed in spite of all the obstacles, and this allowed them to transform Flipkart into one of the most prosperous firms in India. However, Sachin and Binny’s ten-year tenure at Flipkart came to an end in 2018 when Walmart paid $16 billion to acquire the company, placing its valuation at over $20 billion.
Up until 2016, when Binny assumed leadership, Sachin was Flipkart’s CEO. Binny stayed in that position until their departure from the company in 2018. The two have now moved on to launch their individual businesses, despite the fact that many media outlets and others in the Indian Startup Ecosystem viewed their departure as contentious.
After that, Sachin founded Navi Technologies to focus on the expanding Fintech market in India, and Binny is currently using his Flipkart experience to help startup owners grow and scale their businesses with his latest firm, xto10x Technologies.
With Flipkart no longer needing to seek outside funding, there’s no doubt that the company will continue to expand rapidly and aid Walmart in gaining traction in India.
Conclusion
Even though the founders had to leave Flipkart, we shouldn’t forget that Sachin Bansal’s long-term vision and perseverance, along with Binny Bansal’s operational expertise, were crucial in helping Sachin realize his ambitious goals. Without them, Flipkart would not be where it is now.
What then did these founders do well that most other entrepreneurs fail to do? First of all, it is evident that Sachin and Binny prioritize the needs of their clients above everything else. They were aware from away that Indian consumers had little faith in e-commerce websites. By being aware of their needs and meeting those demands, they gained the trust of their clients. its prior engineering experience allowed them to create a website that outperformed that of its few rivals and continued to get better the more input they received from users. The introduction of alternatives like cash on delivery, replacement, and refund policies maintained things easy for the customers.
In addition to putting their consumers first, they had maintained Flipkart’s profitability before looking into outside funding. They had expanded Flipkart in the first two years using the money they made from sales. They made it easy for their investors to insist on funding by demonstrating to them that this was a viable firm. Unlike other entrepreneurs, who look for funding before even testing their business concept, this strategy takes a different approach.
Even though Flipkart experienced its share of setbacks, the company’s founders decided to stand back and assess the situation. They continued to experiment until they discovered the magic combination. Their tenacity and capacity for learning from mistakes enabled them to find creative solutions that allowed them to continue developing and improving Flipkart.
Flipkart may be a giant firm today, employing thousands of people and generating enormous earnings. Even though their paths have diverged after ten years of creating Flipkart, Sachin and Binny are still two driven engineers who are always looking for new challenges to tackle.
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