COMPANY PROFILE

INTRODUCTION

Flipkart is an Indian e-commerce company, headquartered

in Bangalore, Karnataka, India, and incorporated in Singapore as
a private limited company. The company initially focused on online
book sales before expanding into other product categories such
as consumer electronics, fashion, home essentials, groceries, and
lifestyle products.

The service competes primarily with Amazon's Indian subsidiary and

domestic rival Snapdeal. As of March 2017, Flipkart held a 39.5%
market share of India's e-commerce industry. Flipkart has a dominant
position in the apparel segment, bolstered by its acquisition of Myntra,
and was described as being "neck and neck" with Amazon in the sale of
electronics and mobile phones. Flipkart also owns PhonePe, a mobile
payments service based on the UPI.

In August 2018, U.S.-based retail chain Walmart acquired a 77%

controlling stake in Flipkart for US$16 billion, valuing Flipkart at
around $20 billion.

Flipkart Mission, Vision & Values

Flipkart Mission Statement

Providing a delightful customer experience

Flipkart Vision Statement

To become Amazon of India

 Flipkart Values
 Customer First
 Ownership
 Bias For Action
 Audacity
 Respect

HISTORY

Flipkart was founded in October 2007 by Sachin Bansal and Binny

Bansal, alumni of the IIT, Delhi and former Amazon employees. The
company initially focused on online book sales with country-wide
shipping. Flipkart slowly grew in prominence and was receiving 100
orders per day by 2008.

FUNDING AND INVESTMENTS

Initially, they set up their venture with an investment of Rs 400,000 and

Flipkart started its journey by selling books. Because at that time it was
not easy to find vendors of electronics, fashion, or household items in
India. Even book vendors could not completely put their trust in an
Internet-based service like Flipkart in the beginning. At that time Sachin
Bansal took charge as the CEO of the company. Flipkart’s popularity
began to catch the eye of investors and in 2009, the company was able to
secure a capital of $1 million capital investment from an investment
firm, Accel Partners. At that time, the company had a staff of over 150,
and a total of three offices across India. At the end of that year, they
were able to sell books worth a total of Rs 40 million. Although Indian
consumers at that time did not feel comfortable shopping online, Flipkart
was able to gain the trust of customers by providing 24/7 customer
support. In 2010, Tiger Global invested $10 million in Flipkart, and the
company acquired the Bangalore-based social book discovery service
“WeRead“. After the popularity of book sales picked up, Flipkart started
selling mobiles under the electronics category. As the company did not
achieve the desired success in it, they implemented cash on the delivery
system for the first time in India. As a result, the company was able to
gain the trust of consumers and Flipkart’s sales growth continued to
grow. At the beginning of Fiscal Year 2011, their revenue stood at Rs
750 million, and in the same year, they acquired a digital content
platform, Mime360. Flipkart, in the same year, officially registered their
company since at that time the regulations did not allow 100% Foreign
Direct Investment (FDI) to an online retail company providing multi-
brand goods and services.

In 2012, Flipkart launched its own music streaming service, Flyte, with
the intention of expanding their business in online music streaming
services. But the service was discontinued the following year as it could
not attract many customers at that time. In the same year, the company
acquired online electronics retailer Letsbuy for around Rs 12.5 billion,
which further boosted their business. That year, Flipkart occupied first
position in the list of Top 20 E-retailers in India. According to the
company’s website, they were able to sell 100,000 books in one day in
2013. In the same year, e-commerce giant Amazon entered the Indian
market alongside the existing local competitor Snapdeal. The same year
the company launched a payment gateway system called PayZippy, but
shut it down the following year.

In 2014, Flipkart was able to raise a total of $2 billion through Tiger

Global and Accel Partners as well as various investors. That same year,
Flipkart acquired Indian e-commerce company Myntra for $330 million
to add it to the Fashion & Lifestyle category in their portfolio. At the end
of the year, the company’s revenue stood at Rs 28.4 billion. The next
year, in 2015, it increased by about 80% to a little over Rs 95 billion. In
the same year, Flipkart acquired Delhi-based mobile marketing firm”
Appiterate” and bought a minor stake in MapmyIndia to further improve
their delivery operations. According to a report by The Economic Times,
Flipkart was able to sell products worth a total of Rs 20 billion in five
days of the festive sale season last year. The same year, according to a
report by firstpost, during Flipkart’s ‘Big Billion Sale’ the company sold
200 million mobile phones. In 2016, Flipkart acquired Jabong, another
Indian fashion & lifestyle-based e-commerce business, for $60 million.
Following the acquisition, Jabong began operating under Myntra and
Flipkart’s market share in India’s fashion e-commerce sector stood at
more than 60%. That year, Flipkart was able to cross the milestone of
100 million registered customers. In the same year, Co-founder Binny
Bansal became the new CEO of Flipkart when Sachin Bansal stepped
down from the position. According to a report by The Economic Times
in October 2016, that year in its ‘festive sale season’, Flipkart was able
to sell products worth a total of Rs 14 billion in one day. At the end of
the year, the company’s revenue stood at Rs 132 billion. In April 2017,
Tencent, eBay and Microsoft invested $1.4 billion in Flipkart, and the
company’s valuation stood at $11.6 billion. That same year, Flipkart
acquired India’s UPI-based payment start-up PhonePe for an
undisclosed amount. Also in August, Japanese giant SoftBank invested
$2.5 billion of their Vision in the company and at the end of the year, the
company’s revenue stood at about Rs 156 billion.

Where is Flipkart Today?

In 2018, Flipkart was in the leading position with 31.9 % market share
as an online retailer in India, while Amazon had a market share of
31.2%. Besides, the combined sales from Myntra and Jabong increased
Flipkart’s market share to 38.3%. In August of that year, American retail
giant Walmart bought a 77% stake in Flipkart for $16 billion, bringing
the company’s valuation to more than $20 billion. During the
acquisition, Flipkart co-founder Sachin Bansal, along with Softbank,
eBay and Naspers, sold their entire stake to Walmart. After the
acquisition, the company’s top management started reporting to Walmart
eCommerce US CEO, Marc Lore. At the end of the year, the company’s
revenue stood at Rs 217 billion.

In 2019, Flipkart released the in-app streaming service “Flipkart Video”

to compete with Amazon’s premium video streaming service Amazon
Prime. The service’s first original show, Back Benchers, was released on
October 19 of that year. At the end of the year, the company’s revenue
exceeded Rs 436.15 billion, but according to an article in Business
Today, the company’s net loss for the year was $38.35 billion.

In April 2020, Flipkart launched a digital platform for kiranas and local
MSMEs that would allow micro-market level B2B and B2C businesses
to operate with more ease. In July of that year, Flipkart bought a 27%
stake in Arvind Youth Brands, a subsidiary of Arvind Fashions Ltd, for
Rs 2.6 billion. In October, Flipkart bought a 7.8% stake in Aditya Birla
Fashion and Retail (ABFRL) for Rs 15 billion. In September, Chinese
giant Tencent bought a 5.37% stake in Flipkart for 72.7 million.
Walmart currently has 81.29% stake in Flipkart. In addition, co-founder
Binny Bansal, Tiger Global, Microsoft and Accel Partners have a stake
of 4.2%, 4.77%, 1.53% and 1.38%, respectively. According to Statista,
the company’s total revenue at the end of 2020 stood at Rs 346.1 billion.
However, according to a Business-Standard article, the company’s net
loss that year was Rs 31.5 billion.

GROWTH

(Revenue growth of Flipkart Private Limited between financial year

2014 and 2020)
PRODUCTS AND SERVICES

Flipkart Online Services Private Limited owns and operates e-commerce

website. The Company provides books, movies, music, games, consoles,
televisions, mobiles, apparels, digital cameras, computers, network
components, software, peripherals, apparel, shoes, and kitchen
appliances. Flipkart Online Services serves customers in India. Currently
Flipkart has partnered with Phonepe where all recharges, money
transfers and bill payments can be done.

COMPETITORS

Flipkart competitors include Alibaba Group Holding Limited, Amazon,

Etsy, eBay and Snapdeal.
 INDUSTRY PROFILE
(E-COMMERCE)

INTRODUCTION

E-commerce has transformed the way business is done in India. The

Indian E-commerce market is expected to grow to US$ 111.40 billion by
2025 from US$ 46.2 billion as of 2020. By 2030, it is expected to reach
US$ 350 billion. By 2021, total e-commerce sales are expected to reach
US$ 67-84 billion from the US$ 52.57 billion recorded in 2020. India’s
e-commerce market is expected to reach US$ 111 billion by 2024 and
US$ 200 billion by 2026. Much of the growth for the industry has been
triggered by an increase in internet and smartphone penetration. As of
July 2021, the number of internet connections in India significantly
increased to 784.59 million, driven by the ‘Digital India’ programme.
Out of the total internet connections, ~61% connections were in urban
areas, of which 97% connections were wireless.

MARKET SIZE

The Indian online grocery market is estimated to reach US$ 18.2 billion
in 2024 from US $1.9 billion in 2019, expanding at a CAGR of 57%.
India's e-commerce orders volume increased by 36% in the last quarter
of 2020, with the personal care, beauty and wellness (PCB&W) segment
being the largest beneficiary. India's consumer digital economy is
expected to become a US$ 800 billion market by 2030, growing from
US$ 537.5 billion in 2020, driven by strong adoption of online services
such as e-commerce and edtech in the country. With a turnover of $50
billion in 2020, India became the eighth-largest market for e-commerce,
trailing France and a position ahead of Canada. According to
NASSCOM, despite COVID-19 challenges/disruptions, India's e-
commerce market continues to grow at 5%, with expected sales of US$
56.6 billion in 2021.

Propelled by rising smartphone penetration, launch of 4G network and

increasing consumer wealth, the Indian E-commerce market is expected
to grow to US$ 200 billion by 2026 from US$ 38.5 billion in 2017.
Online retail sales in India is expected to grow 31% to touch US$ 32.70
billion in 2018, led by Flipkart, Amazon India and Paytm Mall.

After China and the US, India had the third-largest online shopper base
of 140 million in 2020. Indian consumers are increasingly adopting 5G
smartphones even before roll out of the next-gen mobile broadband
technology in the country. In October 2021, the e-commerce sales
reached US$ 4.6 billion, supported by the festival season in India.
INVESTMENTS/ DEVELOPMENTS

Some of the major developments in the Indian e-commerce sector are as

follows:

 In September 2021, CARS24, India's leading used car e-commerce

platform, has raised US$ 450 million in funding, comprising a US$
340 million Series F equity round and US$ 110 million in debt
from various financial institutions.
 In September 2021, Amazon launched Prime Video Channels in
India. Prime Video Channels will give Prime members a seamless
experience and access to a variety of popular video streaming
services.
 Flipkart, India's e-commerce powerhouse, announced in July 2021
that it has raised US$ 3.6 billion in new funding from various
sources including sovereign funds, private equities and Walmart
(parent company).
 In June 2021, Flipkart added a new fulfilment centre (FC) in
Dankuni, West Bengal. The FC is spread over 2.2 lakh sq. ft. and
has a potential to create ~3,500 direct jobs.
 In June 2021, Grofers, the grocery delivery start-up, reportedly
entered the unicorn club, after raising US$ 120 million from
Zomato, the food delivery platform.
 In May 2021, Amazon introduced a video streaming service within
its shopping app called MiniTV for users in India. MiniTV features
web series, comedy shows and content on tech news, food, beauty
and fashion.
 In May 2021, Flipkart strengthened its grocery infrastructure to
cater to customer safety and demand across India. In this quarter, it
is planning to further expand its fulfilment centre capacity for
grocery by over 8 lakh square feet across Delhi, Kolkata, Chennai,
Coimbatore and Hyderabad.
 In May 2021, Flipkart announced that it is in talks with sovereign
funds, private equity majors and other investors to raise up to US$
2 billion at a valuation of US$ 30 billion.
 In April 2021, Flipkart announced a commercial alliance with
Adani Group to improve the company's logistics and data centre
capabilities and create about 2,500 direct jobs.
 In April 2021, Flipkart announced to acquire Cleartrip, an online
travel technology firm. Flipkart announced to purchase 100%
shareholding of Cleartrip as the company expands its investments
to broaden its digital commerce offerings for customers.
 In April 2021, Kirana commerce platform ElasticRun raised US$
75 million in a round led by existing investors—Avataar Venture
Partners and Prosus Ventures.
  In March 2021, the Confederation of All India Traders (CAIT),
which represents 80 million traders and 40,000 trader associations,
announced the launch of a mobile app for its e-commerce portal,
‘Bharat E-market’. The association aims to get more small traders
to sell online easily through smartphones.

GOVERNMENT INITIATIVES

Since 2014, the Government of India has announced various initiatives,

namely Digital India, Make in India, Start-up India, Skill India and
Innovation Fund. The timely and effective implementation of such
programs will likely support growth of E-commerce in the country.
Some of the major initiatives taken by the Government to promote E-
commerce in India are as follows:

 As of November 2, 2021, the Government e-Marketplace (GeM)

portal served 7.96 million orders worth Rs. 152,315 crore (US$
20.40 billion) to 55,433 buyers from 3.06 million registered sellers
and service providers.
 As of October 11, 2021, the Government e-Marketplace (GeM)
portal served 7.78 million orders worth Rs. 145,583 crore (US$
19.29 billion) to 54,962 buyers from 2.92 million registered sellers
and service providers.
 In a bid to systematise the onboarding process of retailers on e-
commerce platforms, the Department for Promotion of Industry
and Internal Trade (DPIIT) is reportedly planning to utilise the
Open Network for Digital Commerce (ONDC) to set protocols for
cataloguing, vendor discovery and price discovery. The department
aims to provide equal opportunities to all marketplace players to
make optimum use of the e-commerce ecosystem in the larger
interest of the country and its citizen.
 National Retail Policy: The government had identified five areas in
its proposed national retail policy—ease of doing business,
rationalisation of the licence process, digitisation of retail, focus on
reforms and an open network for digital commerce—stating that
offline retail and e-commerce need to be administered in an
integral manner.
 The Consumer Protection (e-commerce) Rules 2020 notified by the
Consumer Affairs Ministry in July directed e-commerce
companies to display the country of origin alongside the product
listings. In addition, the companies will also have to reveal
parameters that go behind determining product listings on their
platforms.
 Government e-Marketplace (GeM) signed a Memorandum of
Understanding (MoU) with Union Bank of India to facilitate a
 cashless, paperless and transparent payment system for an array of
services in October 2019.
 Under the Digital India movement, Government launched various
initiatives like Umang, Start-up India Portal, and Bharat Interface
for Money (BHIM) etc. to boost digitisation.
 In October 2020, Minister of Commerce and Industry, Mr. Piyush
Goyal invited start-ups to register at public procurement portal,
GeM, and offer goods and services to government organisations
and PSUs.
 In order to increase the participation of foreign players in E-
commerce, Indian Government hiked the limit of FDI in E-
commerce marketplace model to up to 100% (in B2B models).
 Heavy investment made by the Government in rolling out fiber
network for 5G will help boost E-commerce in India.

ROAD AHEAD

The E-commerce industry has been directly impacting micro, small &
medium enterprises (MSME) in India by providing means of financing,
technology and training and has a favourable cascading effect on other
industries as well. Indian E-commerce industry has been on an upward
growth trajectory and is expected to surpass the US to become the
second largest E-commerce market in the world by 2034. Technology
enabled innovations like digital payments, hyper-local logistics,
analytics driven customer engagement and digital advertisements will
likely support the growth in the sector. The growth in E-commerce
sector will also boost employment, increase revenues from export,
increase tax collection by exchequers, and provide better products and
services to customers in the long-term.

E-retail market is expected to continue its strong growth - it registered a

CAGR of over 35% to reach Rs. 1.8 trillion (US$ 25.75 billion) in
FY20. Over the next five years, the Indian e-retail industry is projected
to exceed ~300-350 million shoppers, propelling the online Gross
Merchandise Value (GMV) to US$ 100-120 billion by 2025.

According to Bain & Company report, India’s social commerce gross

merchandise value (GMV) stood at ~US$ 2 billion in 2020. By 2025, it
is expected to reach US$ 20 billion, with a potentially monumental jump
to US$ 70 billion by 2030, owing to high mobile usage.