The Billion Dollar Boys

New Delhi: It was a 10,000-a-month allowance from their parents for almost 18 months that helped the Bansals to launch an e-commerce website. What was born to be the differentiator of the e-commerce websites, made the huge ‘difference’ in the online retail segment of India. With a dream in their eyes – changing the entire shopping experience of the internet-savvy people – they set up an entity with a minimal sum of Rs 4 lakh, which today, has become a Billion Dollar enterprise.

Started in 2007 by Sachin Bansal and Binny Bansal, with prior experience in Amazon, the Bangalore-based firm was formally incorporated as a company in October 2008 as Flipkart Online Services Pvt. Ltd

Sachin Bansal, born on August 5, 1981, is an Indian software engineer. Sachin is from Chandigarh and has graduated from the Indian Institute of Technology Delhi with a degree in computer engineering. He was featured in the 2012 Forbes Global “40 under 40” list along with his co-founder Binny Bansal who is now the Chief Operating Officer in Flipkart.

“We are not related in any way, it just happens to be a coincidence that we are now working on Flipkart together. We grew up in Chandigarh and went to the same schools yet did not know each other well. It was in IIT that I really got to know Binny Bansal because he was studying computer science as well,” Sachin said.

“We graduated from IIT in 2005, and we took different jobs in Bangalore. I joined a company called Techspan. Our paths converged again in 2006 when we both joined Amazon.com India. It was then in 2007 when we decided to open a firm.”

However, Binny, who shares the same bity year with Sachin, says “Sachin is intuitive. I am rational and combination works.”

From a two-member embryonic idea to a 9,000-member company today, the Flipkart story is not just about stupendous success and mind-numbing numbers. Much more than that, it’s about redefining customer experience and breaking online shopping inertia.

Flipkart today ships close to 30,000 items per day. Or, in other words, it’s 20 products per minute.

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.

Apart from the initial pumping of capital, Flipkart raised funding from venture capital funds Accel India ($1 million in 2009) and Tiger Global (S$10 million in 2010 and $20 million in June 2011). 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. The company announced, on 10 July 2013, it has raised an additional $200 million from existing investors including Tiger Global, Naspers, Accel Partners and Iconiq Capital.

India’s e-commerce market was worth about $2.5 billion in 2009, it went up to $6.3 billion in 2011 and to $14 billion in 2012. About 75% of this is travel related (airline tickets, railway tickets, hotel bookings, online mobile recharge etc.). Online retailing comprises about 12.5% ($300 Million as of 2009). India has close to 10 million online shoppers and is growing at an estimated 30%. Electronics and Apparel are the biggest categories in terms of sales.

Flipkart’s reported sales were 40 million in FY 2008–2009, 200 million in FY 2009–2010 and 750 million for FY 2010–2011. In FY 2011–2012, Flipkart crossed the 5 billion mark as Internet usage in the country increased and people got accustomed to making purchases online. Flipkart projects its sales to reach 10 billion by the end of 2014.

However, the site reported a loss of Rs 281.7 crore in the year 2012-13, much wider than its loss of Rs 109.9 crore in the previous year. Revenue soared fivefold to more than Rs 1,180 crore from Rs 204.8 crore in the previous year, documents filed by the company with the Registrar of Companies shows.

Acquisitions

2010: WeRead, a social book discovery tool. WeRead, formerly iRead, is an online community of book enthusiasts. WeRead started out as a social cataloging application on Facebook in June 2007 and has since expanded to over 3.1 million active members across Facebook, MySpace, Orkut, Hi5, and Bebo.

2011: Mime360, a Mumbai based startup that offers exchange platform connecting content owners with content publishers (like saregama, Indiatimes etc).

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.

2012: Letsbuy.com, an Indian e-retailer in electronics. Flipkart has bought the company for an estimated $25 million. Letsbuy.com was closed down and all traffic to Letsbuy have been diverted to Flipkart.

2014: Acquired Myntra.com in an estimated INR 2,000 crore deal.

In July 2014, Flipkart launched its own set of tablet phones. The first among these series of tablet phones was Digiflip Pro XT 712 Tablet. In the same year, the e-tailer giant launched its first networking Router, under its own brand name named DigiFlip WR001 300 Mbit/s Wireless N Router.

For now the sky is the limit for the billion dollar boys.