Flipkart has crossed $1 billion (more than Rs.6,100 crore) in sales, achieving the key revenue figure a year ahead of target and some 17 months faster than it took Amazon, the global posterboy of e-commerce, to cross this crucial milestone.
Bangalore-based Flipkart, which started off in October 2007 as an online retailer of books, took a little over six years to cross the $1-billion milestone. By comparison, one-time Indian IT bellwether Infosys Technologies took 23 years to hit $1-billion sales mark. US-based Amazon crossed the $1-billion mark seven years after its 1994 launch. “We are really proud and excited to announce that we have hit a run rate of $1 billion GMV one year before our target,” said Flipkart’s cofounders Sachin Bansal and Binny Bansal, both IIT-Delhi graduates who were former executives at Amazon India and launched Flipkart from a one-room rented apartment in India’s technology capital.
“In March 2011, we announced that by 2015 we wanted to hit $1 billion in GMV. At that point in time our run rate was $10 million (a month).” GMV stands for gross merchandise value, an industry jargon for sales. Flipkart’s revenue performance marks a coming of age for India’s e-commerce sector, which has of late started seeing sales gallop as consumers flock to their “marketplace” model and investors make a beeline to fund strong players. Rising Internet penetration, proliferation of smartphones and a wide array of choices are attracting consumers in droves to ecommerce portals.
The sales performance puts Flipkart indisputably ahead in the race for the top spot in India’s fledgling $2 billion-a-year ecommerce industry. With sales of $1 billion, it accounts for half of all online retail sales in India. The country’s online retail sector is projected to grow to $56 billion by 2023. In China, market leader Alibaba sold around $157 billion worth of goods in 2012. In the US, Internet sales accounted for $450 billion in 2013. Amazon alone accounted for $75 billion. Thursday’s announcement puts pressure on Flipkart’s local peers to keep pace, as much as for Amazon that is six months old in India. Online marketplace Snapdeal expects to reach $1 billion in sales next year, while fashion portal Myntra estimates it will take another two years. So if all goes to plan, India will have three billion-dollar online retailers by end of 2016. “The $1-billion sales (mark) is an extraordinary psychological milestone for Flipkart,” said Arvind Singhal, chairman of retail consultancy Technopak, adding that only three offline retailers — Future Group, Reliance Retail and Tanishq — had crossed it. “There were many naysayers who said e-commerce is for the future. This shows the future has arrived. A lot of kids in India will now dream of creating $1-billion enterprises. We did not have any such examples in India. We had to look to Silicon Valley for such inspiration.”
Flipkart, which started out as an online retailer of books, has raised more than $550 million since inception, of which $360 million was raised last year. The loss-making company, which is backed by South African Internet major Naspers and investment funds such as Dragoneer Investment Group, Morgan Stanley Investment Management, Tiger Global and Accel Partners, was valued at $1.6 billion after its last round of fund-raising.
The company, which started out as an inventory retailer, moved in 2012 to an online marketplace model in which merchants sell directly to consumers on Flipkart’s platform. It now has about 1,000 merchants on its platform and ships out over 1 lakh orders a day on an average.
Employing more than 10,000 people, Flipkart has also grown beyond e-commerce. It spun out its payment solution PayZippy into a separate entity, which is now used by other Internet companies such as MakeMy-Trip, Zansaar and Yepme for payments. The company is also opening up its logistics arm, eKart, which supplies to 150 cities, to other online retailers. The company is also increasingly focusing on mobile commerce, as over 20% of its sales already comes from handheld devices.
Bangalore-based Flipkart, which started off in October 2007 as an online retailer of books, took a little over six years to cross the $1-billion milestone. By comparison, one-time Indian IT bellwether Infosys Technologies took 23 years to hit $1-billion sales mark. US-based Amazon crossed the $1-billion mark seven years after its 1994 launch. “We are really proud and excited to announce that we have hit a run rate of $1 billion GMV one year before our target,” said Flipkart’s cofounders Sachin Bansal and Binny Bansal, both IIT-Delhi graduates who were former executives at Amazon India and launched Flipkart from a one-room rented apartment in India’s technology capital.
“In March 2011, we announced that by 2015 we wanted to hit $1 billion in GMV. At that point in time our run rate was $10 million (a month).” GMV stands for gross merchandise value, an industry jargon for sales. Flipkart’s revenue performance marks a coming of age for India’s e-commerce sector, which has of late started seeing sales gallop as consumers flock to their “marketplace” model and investors make a beeline to fund strong players. Rising Internet penetration, proliferation of smartphones and a wide array of choices are attracting consumers in droves to ecommerce portals.
The sales performance puts Flipkart indisputably ahead in the race for the top spot in India’s fledgling $2 billion-a-year ecommerce industry. With sales of $1 billion, it accounts for half of all online retail sales in India. The country’s online retail sector is projected to grow to $56 billion by 2023. In China, market leader Alibaba sold around $157 billion worth of goods in 2012. In the US, Internet sales accounted for $450 billion in 2013. Amazon alone accounted for $75 billion. Thursday’s announcement puts pressure on Flipkart’s local peers to keep pace, as much as for Amazon that is six months old in India. Online marketplace Snapdeal expects to reach $1 billion in sales next year, while fashion portal Myntra estimates it will take another two years. So if all goes to plan, India will have three billion-dollar online retailers by end of 2016. “The $1-billion sales (mark) is an extraordinary psychological milestone for Flipkart,” said Arvind Singhal, chairman of retail consultancy Technopak, adding that only three offline retailers — Future Group, Reliance Retail and Tanishq — had crossed it. “There were many naysayers who said e-commerce is for the future. This shows the future has arrived. A lot of kids in India will now dream of creating $1-billion enterprises. We did not have any such examples in India. We had to look to Silicon Valley for such inspiration.”
Flipkart, which started out as an online retailer of books, has raised more than $550 million since inception, of which $360 million was raised last year. The loss-making company, which is backed by South African Internet major Naspers and investment funds such as Dragoneer Investment Group, Morgan Stanley Investment Management, Tiger Global and Accel Partners, was valued at $1.6 billion after its last round of fund-raising.
The company, which started out as an inventory retailer, moved in 2012 to an online marketplace model in which merchants sell directly to consumers on Flipkart’s platform. It now has about 1,000 merchants on its platform and ships out over 1 lakh orders a day on an average.
Employing more than 10,000 people, Flipkart has also grown beyond e-commerce. It spun out its payment solution PayZippy into a separate entity, which is now used by other Internet companies such as MakeMy-Trip, Zansaar and Yepme for payments. The company is also opening up its logistics arm, eKart, which supplies to 150 cities, to other online retailers. The company is also increasingly focusing on mobile commerce, as over 20% of its sales already comes from handheld devices.
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