Home grown ecommerce company Flipkart has been growing rapidly, the company attributes this growth to its customers and not competition, today it is giving tough competition to international rivals like Amazon and Ebay in terms of profitable ventures and the battle for customers.
In an interview, Sachin Bansal, the co-founder & CEO of Flipkart talks about it’s plans to open up different parts of the e-commerce platform, its increasing focus on mobile and upcountry markets. Excerpts:
CT: Where do you see Flipkart in next five years?
Sachin Bansal: The e-commerce growth story in the past few years has been driven by an Internet-savvy population. The influence of such developments on those who predominantly shop offline is also beginning to take root, and this trend will continue in the future as well.
In addition, the virtual mall culture has spread to Tier 2 and 3 markets owing to increase in disposable income of consumers in these markets coupled with the restricted choices available offline for these shoppers. The difference between the revenue earned by the urban and rural market is thinning rapidly. An immense opportunity is waiting to be tapped in these markets and the trends one sees in online shopping will come from these cities in the future.
CT: What prompted you to launch Flipkart.com? Please take us through the journey of Flipkart…
Sachin Bansal: While I and Binny were working together in Bangalore, we started toying with the idea of setting up our own business. We wanted it to be something in the consumer space, and initially, landed on the idea of a price comparison site.
Our initial research showed that there weren’t any good sites in this field. Thus, we started thinking of setting up an online shopping site of our own.We were a group of friends who used to discuss business ideas. During these casual brainstorming sessions, Binny and I realized that we think along similar lines and had similar ideas in terms of what we wanted to achieve and whom we wanted to target. It made sense for both of us to team up.
CT: Flipkart started its beginning with an online book shop and today you are into a complete e-commerce website, how did you manage all this? What is it that sets you apart?
Sachin Bansal: Having realized that there was a large population in India that loved shopping but did not have time, we forayed into the online space with Flipkart. We started with books, as the absence of tax, low prices and reduced danger of transit damage made it an easy entry point for online shopping. Once we got consumer traction and confidence and the reordering went up by 60-70 percent, we decided to move on to other categories.
CT: In the course of journey, what were the major challenges you had come across?
Sachin Bansal: A lot of international book publishers were keen to explore the Indian market. However, they could not find much interest from retailers in India. We were able to solve this problem by setting up a ‘Just In Time’ process, wherein once a customer placed an order for an international book, we were able to get it directly from the international location within seven to ten days.
CT: How did you manage to get funds for your company? Was it very difficult to convince investors?
Sachin Bansal: In the beginning, Binny and I bootstrapped Flipkart with Rs 4 lakh. As a growing business, we were always in talks with investors and looking for opportunities to connect with like-minded people. Our current investors include Accel Partners, Tiger Global, Naspers and Iconiq Capital.
CT: Amongst existing online marketplace players like eBay and Amazon, how do you position your company in the e-commerce space in India?
Sachin Bansal: We have about a third of the e-commerce market share in India. As per Alexa rankings, we are the most visited website amongst all online shopping sites in the country, and rank at No. 11 amongst all websites in India.
According to the Nielsen Book Scan Retail Panel data, Flipkart holds an average of 40-45 percent in terms of value when it comes to the organised books market in India. We are the market leaders when it comes to consumer electronics as well.
CT: What are some of the milestones Flipkart wants to achive?
Sachin Bansal: An IPO is definitely a part of our future business plan and something we will consider down the line. However, we are well-funded at the moment and on our way to achieve our business goals over the next few years.
CT: What scope do you see in mobile e-commerce, as India is among the fastest smartphones users?
Sachin Bansal: Mobile commerce is going to be a focus area for us. We will simultaneously look at improving the overall browsing experience by enhancing our payment, browsing and search capabilities. While we continue to expand product range, on-site personalization and more customized recommendations will also start gaining importance in our scheme of things. Our aim is to continuously improve the shopping experience for customers and provide sellers with a highly scalable platform to do business.