The History and Rise of Flipkart: Largest eCommarce Company in India


Flipkart, one of the most popular & leading e-commerce companies in India with a market share of 31.9%. In 2016, Flipkart’s valuation stood at $20 billion, when American retail giant Walmart bought 77% stake in the company for $16 billion. Flipkart currently has more than 200 million registered customers and the company is offering more than 150 million products in more than 80 categories. Flipkart currently has about 36,000 employees and is competing in the e-commerce sector in India with competitors such as Amazon and Snapdeal.

Earlier History of Flipkart

Flipkart was started by two friends Sachin Bansal and Binny Bansal. Flipkart was founded in 2007 in Bangalore, India. An interesting fact is, they share the same surname but they are not actually related. Sachin Bansal was born in 1981 in Chandigarh, India. In 2005, Sachin graduated from the Indian Institute of Technology (IIT), Delhi, with a degree in Computer Engineering he met Binny Bansal, the other founder of Flipkart. After graduation, Sachin joined Techspan and shortly after this, he joined Amazon Web Services in 2006 as a Senior Software Engineer.

Binny Bansal, on the other hand, was born in 1982 in Chandigarh, India. Along with Sachin, Binny also graduated from IIT in 2005 with a degree in Computer Engineering. That’s where the friendship between Binny and Sachin began. After graduation, Binny joined Sarnoff Corporation, but in 2007 he also joined Amazon Web Services.

In 2007, Sachin and Binny first thought of creating a comparison search engine. At that time, they saw a huge gap in the e-commerce sector in India and quit their job at Amazon Web Services to establish their e-commerce site, Flipkart. 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. In 2008, the company started operating with an office in a two-room apartment in Bangalore and gained popularity among book readers. 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.

Where Flipkart Was Born

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.

Emergence of Flipkart

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.

Flipkart Streaming Platform

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 Bini 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.

Flipkart revenue
Flipkart Revenue Report

The Bottom Line

Since its inception, Flipkart has been able to sustain their steady revenue growth every year. Due to India’s rising state of the middle-class community and expanding internet users, there is a lot of potential for e-commerce in the country. Realizing that Walmart’s investment in Flipkart was a very timely decision. However, Flipkart’s competition is a world class global e-commerce giant Amazon that has been giving the company a run for its money. Currently, the difference in market share between the two companies is not much. Ever since entering the Indian market in 2013, Flipkart has gradually built its reputation & worked to increase its market share. Besides, Flipkart is ruling the market compared to others in the Indian fashion and lifestyle and budget smartphone segment. Will the company be able to maintain its current position against Amazon in the future?

Leave a Comment