It is hard to imagine that one small company can completely transform the way we shop. But that's exactly what Flipkart has done. In 2007, E-commerce was still considered a distinct segment business and most Indians did their shopping offline. The Internet was seizing the globe and Steve Jobs had just launched the world’s first iPhone which was getting ready to disrupt the complete smartphone industry in the years to come.
Two software engineers in India, Sachin Bansal, and Binny Bansal did notice the changing dynamic of technology and realized the potential of E-commerce. While there have been only 50 million internet users in India at that time, they knew that with smartphones coming into the image, it was only a matter of time when more Indians will be connected to the net. They wanted to exploit this chance to make an internet shopping platform that may take India’s shopping experience to the next level.
Fast forward to today, India has over 570 million internet users, and also the number of individuals shopping online has increased significantly. What started as a two-man mission to make India’s most trusted online shopping platform has transpired into Flipkart, which is India’s leading E-commerce platform offering a list of 80 million products across 80 categories to quite 100 million customers.
In this article of Verzeo startup stories, we'll examine the story of Flipkart and the way Sachin and Binny were ready to build India’s E-commerce industry from scratch.
Before we start, you ought to know that if Sachin and Binny had been better students, there was an honest chance that Flipkart would haven't happened. Thankfully for us, they weren't.
Back in 2005, Sachin and Binny were pursuing their B.Tech from IIT Delhi. While most students had gone home during the summer break, Sachin and Binny were stuck in college as that they didn't complete their projects on time. it was while performing on their projects within the same lab that the 2 met for the primary time. On a side note, it had been probably the most effective summer for Binny, although he didn’t realize it at the time, but not only did he meet his future business partner Sachin but also his life partner Trisha at the identical lab.
However, Sachin and Binny only became friends. After their graduation, they moved to Bangalore for their jobs together with a pair of other guys from their college. At the time, Sachin was functioning at a corporation called Techspan and Binny was working with Sarnoff. Sachin had started working with Amazon in 2006 and Binny followed him in Amazon later in 2007.
Soon the two got tired of their jobs at Amazon and began fidgeting with ideas. Being fascinated with E-commerce, they decided to start a shopping website where you can compare products. They planned to make an internet site that will help users to check the prices of products across different websites and help them get the most effective value for his or her money.
As they started viewing different E-commerce websites, they soon realized that online website experience was really bad. They knew that they might never purchase from those poorly designed websites and that they didn’t expect others to try to do that either.
While they'd to shelf their idea for a comparison-shopping website, they started thinking if they may build a much better website and provide a better shopping experience to their customers. The duo was confident that being technology enthusiasts, they might pair.
Without wasting any time, the two quit Amazon, pooled together 4 lakh rupees, and commenced Flipkart in September of 2007. they'd decided to sell books on their platform because it was easy to list, ship, and find vendors as compared to other categories like electronics or fashion which might cost them lots of cash.
As they started searching for vendors to list books on their platform, they soon revealed that it had not been as easy as that they had thought. People still failed to understand the internet and doing business online wasn't something extremely popular, so most vendors were highly sceptical and didn’t trust their business model.
However, the duo remained persistent and managed to convince some vendors to require an opportunity on them. With vendors convinced, they launched their website in October of 2007.
By the end of October, that they had received their first order from a young techie named VVK Chandra who lived in Mahbubnagar in Telangana (previously the state of Andhra Pradesh). Their excitement from their first order soon made them anxious as their vendors told them that the book was unavailable. After feverishly trying to find the book all across Bangalore, the duo managed to urge hold of the book and successfully delivered their first order.
With that order, Flipkart was officially in business., There were barely any good E-commerce websites in India, and therefore the founders wanted to put their customers first and also wanted to use technology to provide them with a stronger shopping experience.
Their efforts to deliver their first order showed their commitment towards their customers and it'd serve them well within the future. Being a two-man startup, they took care of everything from developing their website to delivering books. they'd managed to deliver 20 shipments in 2007 itself.
Within six months the startup was operationally profitable and in 2008, that they had moved into a 2BHK apartment in Kormangala, which might function as their office for the approaching years. Slowly, their business began to boom and by the end of 2009, Flipkart had managed to sell books worth ₹4 crores.
Flipkart was successful with book lovers and investors were getting down to mark. In 2009, Flipkart got its first capital investment of $1 million from Accel Partners, a renowned investment firm. By the top of 2009, the startup already had over 150 employees and three offices across India.
In such a brief span of your time, Sachin and Binny had managed to grow their company at an incredible pace and that they had also developed their personalities as entrepreneurs. Sachin was good at dreaming big and was the person behind ideas and vision of Flipkart, while Binny, a shy individual was called the operations guys. They had found in one another an excellent partner who complemented each other’s skills. Whatever Sachin dreamed, Binny made it a reality.
India’s E-commerce was still a distinct segment business and an oversized population was still hesitant to buy online. However, Flipkart had built a brand of trust among its loyal customers and continued to instil confidence by providing 24×7 customer support and their growth continued. But things were changing drastically, once
Tiger Global came on board as their new partnership with its first investment of US$10 million in 2010.
Now that Flipkart had already become a platform of choice for book lovers in India, the startup was able to take its next step. With new partners and more investment, Flipkart was able to dive into the electronics category. So they started selling mobiles in 2010.
But months went along and while book sales continued to grow, mobile sales remained stagnant. it was clear that customers were willing to pay small amounts of cash like 500 rupees online but they weren't quite able to pay large sums of cash like Rs 10,000 or 15,000 for mobiles without first touching and feeling their products, something which they had readily available in brick-and-mortar shoes.
Flipkart still had gathered enough fame to build that quantity of trust among its customers. This problem forced the founders to think differently. and that they were ready to come up with a superb idea of introducing Cash on Delivery. Flipkart was among one among the primary E-commerce startups to introduce cash on delivery option for its customers.
The founders were hell-bent on building trust among Indian consumers and that they doubled down on their dream by introducing no questions asked return policy and followed it up by a replacement policy. They were willing to sacrifice growth for customer satisfaction.
Today, these three features are offered by every E-commerce website in India but it had been extraordinary back in 2010 or 2011. Customers loved these options as they offered them flexibility in paying and buying products on their terms. due to Sachin and Binny, Indians who were scared of shopping online were now warming up to the present novel idea of online shopping and getting the products delivered right at their doorsteps.
Now a bit like offline shopping, that they had the choice of either just returning the merchandise if they didn’t prefer it or get a whole refund. This was a game-changer and Flipkart’s sales began to grow even quicker then they'd ever grown. From merely ₹4 crores in revenues within the twelve months of 2009, Flipkart expanded its revenues to ₹75 crores by the top of the fiscal year of 2011, growth of 18.75 times more than the previous occasion.
Soon there was no stopping Flipkart, they'd cracked the code to Indian consumers and broke the hegemony of brick-and-mortar stores. They continued expanding across categories and money came pouring in from investors. By 2012, Flipkart had already become a unicorn, the second in India after InMobi.
The term “Unicorn” only became popular after it was coined in 2013 by Aileen Lee, who is the founding father of Cowboy Ventures. Flipkart became a corporation that other startups would hunt within the coming years, while Sachin and Binny became the face of India’s growing startup ecosystem.
Flipkart was the undisputed leader of the E-commerce space in India. the corporate was a giant reason for enabling several customers to buy online. However, things were to change with the entry of another E-Commerce giant, Amazon, in 2013.
Aside from Amazon, Flipkart had to also contend with another Indian E-commerce startup Snapdeal. While Snapdeal was still small compared to Flipkart, Amazon was proving to be a force to reckon with. It became a battle of David vs Goliath.
This failed to deter Sachin and Binny, as they knew their customers better and had built a brand of trust which was supported by their technology platform that had been built over years of customer feedback. Their confidence was shared by their investors who helped Flipkart raise nearly $2 billion in 2014 alone. one amongst their oldest investors Tiger Global and Accel continued to place their faith within the company.
Armed with a $2 billion monetary fund, Flipkart acquired Myntra in 2014 to expand into fashion E-commerce. Later in 2016, Flipkart acquired another fashion E-commerce startup Jabong to scale rapidly in online fashion commerce. This proved to be a sensible move by the founders as they realized they were at an advantage acquiring two of the leading flash-fashion platforms instead of building one on their own, which might have cost them time and money.
With Amazon competing for the market in India, Flipkart didn’t have the luxury of your time that it had during the first days. due to that acquisition, Flipkart is now a pacesetter in fashion E-commerce space with over 60% of market share.
Flipkart’s ability to grasp the Indian market and also the experience of their founders and team in creating a corporation from the bottom had given them the advantage over Amazon which helped them to remain competitive and sooner than Amazon.
As of 2018, Flipkart remains India’s leading online retailer with a market share of 31.9%, compared to 31.2% of Amazon. After adding the sales of Myntra and Jabong, Flipkart’s total market share increases to 38.3%.
With all of Flipkart’s success, the founders had to face lots of challenges and suffer quite some failures as well. They could adapt and experiment quickly to scale rapidly, which helped them build Flipkart into an E-commerce giant it's today.
In 2011, Flipkart acquired a digital content platform Mime360 and tried to expand into online music streaming with the launch of its music streaming service Flyte in 2012. Piracy was a serious issue at the time and there was no dearth of recent torrent websites offering free music stoning up daily. With numerous online platforms available for downloading free music, Flipkart’s latest experiment was sure to fail. Flipkart had to close up Flyte in 2013.
Before the corporate found success in digital payments through PhonePe, it tried to launch its payment gateway called PayZippy in 2013. Unable to onboard merchants, its payment gateway was close up in 2014.
Then there was Flipkart’s app-only experiment where the company blocked access to its website for mobile users and directed them to download its app. While the bulk of their traffic came from mobile users, this move was still unsuccessful and Flipkart had to reinstate its website, giving users back the choice of accessing both mobile websites and apps.
Despite all the setbacks, Flipkart founders continued to concentrate on what their customers wanted which helped them to metamorphose Flipkart into one of India’s most successful startups. However, in 2018, Sachin and Binny’s decade long journey at Flipkart ended after Walmart acquired Flipkart for $16 billion and valuing the company at over $20 billion.
Sachin had served as Flipkart’s CEO until 2016 when Binny took over the reins and remained the CEO until their exit from Flipkart in 2018. While their exit was seen as controversial by many media outlets and folks within the Indian Startup Ecosystem, the two have since moved on to start their respective ventures.
Sachin went on to start Navi Technologies to specialize in India’s growing Fintech space, while Binny is using his experience at Flipkart to assist startup founders to scale and grow their business through his latest venture called xto10x Technologies.
Now that Flipkart doesn’t have to hunt for outside investment, there's little doubt that the corporate will still grow tremendously and help Walmart establish a stronghold in India.
Even though the founders needed to leave Flipkart, we should not forget that Flipkart wouldn’t have reached where it is today without the long-run vision and determination of Sachin Bansal and the operational skills of Binny Bansal who worked at making Sachin’s lofty dreams a reality.
So what's it that these founders did right that the majority of entrepreneurs do wrong? Firstly, it's clear that Sachin and Binny always put the wants of their customers first. They knew from the word-go that Indian customers lacked trust in E-Commerce websites. They built the trust of their customers by understanding their needs and giving them exactly what they wanted. They already had an engineering background, which helped them built an internet site that was better than their few competitors and which only improved as more feedback they got from their customers. Things were kept simple for the shoppers by introducing options like cash on delivery, replacement, and refund policies.
Apart from prioritizing their customers, they had kept Flipkart profitable before they explored for outside investment. During the primary two years, they'd grown Flipkart out of the revenues they generated from their sales. They proved to their investors that this was a sustainable business, which made it easy for them to urge investment. This approach is different from most entrepreneurs, who go searching for investment before they even test their business model.
Flipkart had its own set of failures but that didn't deter the founders to take a step back and take stock. They kept on experimenting until they found the winning formula. It was their persistence and the ability to bounce back from failures that helped them discover new and innovative methods to keep building and enhancing Flipkart.
Today, Flipkart may be a huge company with massive revenues and thousands of employees. However, Sachin and Binny are still two passionate engineers who are just searching for new problems to resolve, irrespective of the fact that their journeys have taken them on different roads after a decade of building Flipkart.