Flipkart Achieves $1 Billion Sales, 1 Year Earlier Than Expected
WOW! The VC money is definitely being put to good use at Flipkart. If you were one of those who were surprised by the amount of money Flipkart has raised from VCs, this stat will tell you why.
Flipkart founders Sachin Bansal and Binny Bansal have announced that they have crossed $1 billion Gross Merchandise Volume (GMV) before 2015, thereby beating their own estimates. To put this milestone in perspective, the global online retail giant Amazon.com achieved the same feat in 7 years from the time they launched. Flipkart has done it much faster than them.
In an internal memo shared with their employees, Flipkart founders said, “Today, we are really proud and excited to announce that we have hit a run rate of $1 billion GMV one year before our target.”
Three years back, in 2011, when Flipkart had $10 million GMV, they had said that they plan to cross $1 billion GMV by 2015 which has been crossed this year itself. “This means that we have grown 100X in the last three years”, noted the memo.
Flipkart is currently on a roller coaster ride, as it has now established themselves as the number 1 ecommerce portal in India. Their closest competitor Snapdeal has predicted they will cross $1 billion GMV by 2015, and Amazon and eBay are trying hard as well to cross this milestone. Last year, Myntra had overtaken Flipkart in terms of traffic, but as of now, Flipkart has beaten them all.
In the last few months, Flipkart has initiated several positive actions which may have helped them to beat their own estimates in terms of online sales. The threat of Amazon had prompted them to launch same-day deliveries across 7 cities. Last year, they opened their platform for third-party vendors as they converted themselves into a marketplace, which has boosted their monthly sales incredibly.
Additionally, they understand the importance of affiliate marketing, and last year they had increased their affiliate commissions to boost sales via partners and affiliate marketing, and the results are clearly evident. In October last year, they had had successfully raised $160 million from investors, taking their total funding to mind-boggling $541 million, making it the most deeply funded ecommerce portal ever created in India. [Check the funding chart at the end of article]
But, they had their own share of problems as well, as some customers reported stones being delivered in place of gadgets. Logistics and delivery is an issue which every ecommerce portal is battling with, but as the market matures, these issues would be tackled in a better way.
Founded in 2007, Flipkart started with selling books online. But with increasing traffic and popularity, within 2 years they became India’s largest online bookseller surpassing Infibeam, Landmark and IndiaPlaza. In 2010, they diversified into electronic gadgets and by 2011, they were selling literally everything online. By 2012, Flipkart had become India’s first Billion Dollar Internet Company, and now, they have crossed $1 billion GMV!
As Indian eCommerce industry is set to become $22 billion industry, catering to 200 million+ Internet users, it would be really interesting to watch the progress of Flipkart, and how can they capitalize on their position to make bigger dents in the Indian eCommerce industry.
Flipkart Funding Chart
|First Round||Accel India||2009||USD 1 Million|
|Second Round||Tiger Global||2010||USD 10 Million|
|Third Round||Tiger Global||June 2011||USD 20 Million|
|Fourth Round||Naspers / ICONIQ Capital||August 2012||USD 150 Million|
|Fifth Round||Naspers, Accel Partners, Tiger Global, and ICONIQ Capital||July 2013||USD 200 Million|
|Sixth Round||Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina and Vulcan Capital, Tiger Global||Oct 2013||USD 160 Million|