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Indian E-Commerce Firm Flipkart Raises Eye-Popping $1B

164 points by dandrewsen 12y ago

hemantv 12y ago
$1 Billion is lot of money in India. Only future will tell what they will build from it.
- epistasis 12y ago
  $1B is a lot of money in the US too, even for a company's valuation. But to raise $1B is, well, astronomical.
  - visakanv 12y ago
    India does have 1.2+ billion people! That must be part of the justification, surely.
    - TheIronYuppie 12y ago
      India is a huge opportunity, true. But nearly 30% of Indians live on less than $2/day. I do not believe these are part of that equation.
      - pessimizer 12y ago
        So 840M that live on more than $2 a day, then. That's around the combined population of the US and Europe.
        adventured 12y ago
        The median per capita income in India is around $650. That places them around #100 in the world in that regard. The bottom billion people in India have less disposable income than the five million people living in Norway.
        onedev 12y ago
        You are thinking short term.
        adventured 12y ago
        I recognize India's potential, but my answer was about the near term indeed, a 5 to 10 year window. I personally wouldn't value a company further out than that.
        pessimizer 12y ago
        What about the top 200 million?
        adventured 12y ago
        Much like China, the top 100 or 200 million can be a very lucrative consumer market, absolutely.
        train_robber 12y ago
        You would also need to put into consideration cost of living. $650 would go a long way in India.
        known 12y ago
        GDP (USD)...population...per-capita GDP US.......15.68T......313M.....$49,965 UK.........2.44T.......63M.....$38,514 China.....8.23T...1,351M.......$6,091 Nigeria....262b......168M......$1,555 India......1.82T...1,237M......$1,489 https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_cd&idim=country:AUS# https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&...!
  - hrjet 12y ago
    But then it deals with physical goods; lots of inventory, physical ops, street-level marketing. Is $1B really high for such a company?
    - adventured 12y ago
      Yes, very high. Especially if the sales numbers thrown around in this thread are accurate (eg $500m to $1b in sales). Retail companies historically get relatively low valuations (particularly compared to your typical tech company), in part because the margins tend to be very mediocre in retail. A software company would typically have margins 5 to 10 times greater than most retail companies. Amazon has been an anomaly in this regard, while they have the terrible margins, they have been rewarded with a massive valuation.
  - caseydurfee 12y ago
    They'd already raised over 800M before this round.
- known 12y ago
  Flipkart is NOT a profit making company as of today.
param 12y ago
Best of luck to both founders, and this is great news for the Indian startup industry, but I am confused by this statement: “We are not thinking about [an IPO]. We have not settled on a business model that we can take public,” Shouldn't the business model be validated by your Series A or max B? Flipkart has taken multiple rounds in the past, and this one looks as large as a Series C. Edit: Firms involved also sound like series C firms - Tiger Global, DST etc.
- aashaykumar92 12y ago
  I think their base model is validated, it just may need more. According to the TC article [1], "In a statement, Flipkart said the 'funds will be used to make long-term strategic investments in India, especially in mobile technology.'" So they are predicting some of these acquisitions to help grow that model before going public. [1] http://techcrunch.com/2014/07/29/indian-e-commerce-giant-flipkart-raises-massive-1b-round/ http://techcrunch.com/2014/07/29/indian-e-commerce-giant-fli...
netcan 12y ago
Wow. Is this real? Does anyone know anything about this company? Wikipedia has the company's revenue at 200m USD as of January, making an operational loss. They don't sell internationally. Is there some important part to this story that we're missing? Seems like there must be something worth knowing about here. On a slightly unrelated note, it's amazing that billions can be raised pre-IPO these days. It almost buries IPOs as a fund raising methods.I realize exit/liquidity was/is the bigger reason for tech IPOs already, but it seems somehow unnatural to completely abandon the role of financing. Not sure where I'm going with this.
- gshahlot 12y ago
  200m USD was in the FY 12-13. They hit $1B GMV around 4 months back.
  - netcan 12y ago
    GMV?
    - swatkat 12y ago
      http://en.wikipedia.org/wiki/Gross_merchandise_volume http://en.wikipedia.org/wiki/Gross_merchandise_volume
    - deleted 12y ago
      [deleted]
  - notahacker 12y ago
    That gives them 1/5 of India's entire ecommerce business (if the figures in the article about percentage of retail are accurate) which is not inconsiderable. On the other hand, since the gross margins on those sales won't be large, it also suggests that the volume of ecommerce carried out in India will have to grow by an order of magnitude (even if Flipkart can grow that large market share) if Flipkart is to earn a return on that huge investment. Bearing in mind the Indian middle class has been internet savvy for a while that's asking for a lot unless the investors are very patient.
2511 12y ago
I like that the Indian start up scene is getting serious now. Entrepreneurs are brave enough to compete with the big players unlike a few years ago when most start ups were basically simple web apps or a tech consultancy kind of thing. As an Indian this gives me hope that a soon the brain drain will stop and a lot of talented Indians abroad (with connections and some money to invest) will come back to India to either start up or work for one.
- r_singh 12y ago
  I really hope the same. There was a story on HN just a few days ago about an Indian from Cornell, who came back to India to do an India centric startup. Here's the story about why he chose to come back: https://news.ycombinator.com/item?id=8090158 https://news.ycombinator.com/item?id=8090158
fununclebob 12y ago
Flipkart recently moved away from the Amazon warehousing model to an online marketplace model and I've heard nothing but complaints from customers regarding the switch. Even their own presence in the marketplace is unable to keep up the quality of service as it scales, and all kinds of scammy retailers have set up shop now which has made it relatively more dangerous to purchase on their service now. Time will tell if they pay that billion back.
- shankysingh 12y ago
  I agree , from my personal experience, quality of their service has gone down since they moved to an online marketplace model. But from what I have heard on grapevine this was also a clever ploy to work around Indian law restrictions on FDI. This answer on quoara details it all. Please, take it with grain of salt. http://www.quora.com/Flipkart/What-could-be-the-reasons-behind-Flipkart-selling-WS-retail-to-Rajeev-Kuchhal http://www.quora.com/Flipkart/What-could-be-the-reasons-behi...
- Pxtl 12y ago
  So in other words, they tried to follow Amazon's "affiliates" business model but embraced it too hard because they didn't realize that everybody hates the affiliates and only ever buy from them on Amazon because of desperation or accident.
  - barry-cotter 12y ago
    Or they saw the way taobao owns online B2C commerce in China and decided they wanted the Indian equivalent.
- zhte415 12y ago
  > Flipkart recently moved away from the Amazon warehousing model to an online marketplace model and I've heard nothing but complaints... Could be worth noting Taobao here. Starting as C2C (unlike Amazon / a warehousing approach) it has largely moved to a store-based approach (B2C). Given that Flipkart are moving towards B2C (via stores) it would be interesting to compare and contrast complements and conflicts the couple have in their respective markets.
akx 12y ago
Huh. Never heard of the company, but what surprised me is that the site is actually really fast and snappy, somehow, for me -- especially considering what I saw when I took a look at the source code.
- swatkat 12y ago
  As mentioned elsewhere in this thread, Flipkart is India-only as of now. They are India's Amazon :) I've been using Flipkart since its inception, never had any issues.
- lovelearning 12y ago
  What did you find in their source code?
  - seanflyon 12y ago
    I assume he means their in browser JavaScript.
    - akx 12y ago
      Yeah, the HTML has bits of markup, JavaScript and CSS interspersed in a way that's hardly the state of the art for modern web dev.
- Theodores 12y ago
  Agreed. Very pleasing on the eye with clear navigation, puts Amazon slightly to shame.
  - dheer01 12y ago
    You might find it hard to belive - but customer experience is slightly better on Flipkart than on Amazon(US).
  - ilamparithi 12y ago
    Right. The filter options they have are much better than other e-commerce sites.
piyushpr134 12y ago
For the uninitiated: Flipkart is AMZN of India. They are doing tonnes of sales here. FK is getting so much valuation as India does not have a big enough organised retail (roughly 5%). This means there is a generation which would move on from unorganized retail to online. And hence the astronomical valuations. FK also has some unique ideas. For instance, they launched Moto e, g and x in India as exclusive sellers. They managed to sell 1 million of those phones in last 6 months. This alone would have easily resulted in a $20-25 million rev.
- shimon_e 12y ago
  20-25 million revenue? I think you left off a zero there.... Unless those phones only have an average price of $20-25 in India.
  - ashray 12y ago
    He could mean net revenue for the retailer as in profit. I don't think these phones would have a margin much greater than $20-$25 ?
    - frandroid 12y ago
      Then that's called income, not revenue.
      - ashray 12y ago
        No need to downvote if you just disagree, that's not how HN is supposed to work :( It appears that you are using a different meaning for revenue. http://en.wikipedia.org/wiki/Revenue http://en.wikipedia.org/wiki/Revenue Revenue normally refers to top-line or gross income. This is why I clarified with the 'net-' addition, it's probably what led to the confusion in the first place. Flipkart nowadays anyway operates on a 'store' model for the most part so sales margin for this discussion could actually be meaningless anyway. But since they were doing an exclusive, perhaps they were directly selling, in which case it would be pertinent to the discussion.
quarterwave 12y ago
After my family started buying dresses online (average $20 per item), I started paying more attention. Online shopping in India not only provides a vast range across vendors, it also saves the cost and hassle of travelling to a big store - especially for singleton purchases. When discerning dress buyers are happy to buy online that must signal some kind of shift.
jestinjoy1 12y ago
The best part about Flipkart are 1. They made online selling popular in India 2. Products got delivered in door steps 3. I could buy books at 20%-50% discount and foreign edition textbooks easily. This is something we couldnt even dream about, in some parts of India 4. I could easily get products from lee, nike, puma,... at discounted price too. If you are not in a big city, then its difficult to get branded products and if you get then you need to worry about whether they are original or not I bought close to 150 books from Flipkart, which would cost some 70$ more if I buy from local sellers. I have my Toshiba Laptop, Moto G phone, Lee Shirt, Sennheiser Headphone, Reebok shoe all bought from online sellers :)
- 2511 12y ago
  Also: 5) They implemented cash on delivery. A very brave and novel approach. This basically instilled confidence in the indian online buyer 6) Fast delivery. I will go ahead and say probably as good as Amazon or even better in big cities. They built warehouses in the big cities and stocked fast moving items in a lot of places 7) almost guaranteed savings on all things. I have rarely seen anything that is more expensive on FP compared to a store. 8) Good online experience. Little things like checking delivery using your pincode. Responsive site. Product suggestions.
  - Grue3 12y ago
    How is cash on delivery novel? Where credit cards are not ubiquitous this is the only way to sell stuff online. Pretty much every single online store in my country did this for years.
    - 2511 12y ago
      Well..its India..too may practical issues that can dig into your profit
    - _nedR 12y ago
      Which country is that, if I may ask?
- 12y ago
techaddict009 12y ago
Flipkart revolutionized ecommerce in India with the concept of COD (Cash On Delivery). That is you pay when you receive the product.
- tn13 12y ago
  That is not true at all. Various other companies had COD long before Flipkart. Also, COD does not work in India. http://forbesindia.com/article/briefing/cash-on-delivery-doesnt-work-for-companies/33626/1 http://forbesindia.com/article/briefing/cash-on-delivery-doe...
- agyli 12y ago
  I used to buy things from eBay India using CoD in 2004. Flipkart was not even founded at that time. I know lot of people who were afraid to buy things from ebay even though ebay offered buyer protection for long long time. In my opinion, Flipkart is successful in India because they created trust among people who were afraid (based on false rumors) to buy things online.
tn13 12y ago
I find Flipkart's valuation very puzzling clearly the investors have seen what I haven't. Flipkart's revenue is extremely less for a population of the size of India. They makes ~$200M in revenues per year with an operational loss which I am told is significant. Flipkart has managed to scale its revenue but without making a profit. Even this would have appeared as a good opportunity if Flipkart was kind of de-facto e-commerce business in India. Turns out that it is not. Snapdeal, Junglee (Amazon India) are pretty close. Myntra was the leader in apparel and fashion products sale online which was then acquired by Flipkart. (Myntra was not profitable either). I find it hard to understand why anyone believes that Flipkart would ever make profit in next 5 years or so. I find it hard to believe. Unlike USA, India has not yet figured out how to build proper usable roads, the cities are not planned and India does not have a proper addressing system. Government regulations have further made life difficult for courier companies. All this has resulted into cities and towns where traveling over few kms is very expensive and time consuming as a result small shops catering to need of local communities have sprung up like mushrooms. Current India is probably resembles more to the A&P days of USA. My assertion is validated by the fact that Travel Booking and Movie ticket booking websites in India are growing fast and also very profitable.
- devnonymous 12y ago
  I find people's (especially Indian's) puzzled reaction to news about flipkart's funding puzzling. Flipkart has altered the online buying habits of urban Indians significantly. I would be surprised to meet an urban Indian today who has not heard about flipkart. By urban I mean the tier 2-3 cities as well. So is it just the fact that the current revenue numbers do not add up that makes it puzzling to some (most??) ? If I was an investor, I'd bet on flipkart, solely based on watching the change in spending habits of the urban Indians over the last 5 years. Instead on narrowly focusing on the online business if you take a broad look at the way things are changing the tier 2/3 cities in India you'll understand the investor optimism. You mentioned: > Unlike USA, India has not yet figured out how to build proper usable roads, > the cities are not planned and India does not have a proper addressing > system. Government regulations have further made life difficult for courier > companies. All this has resulted into cities and towns where traveling over > few kms is very expensive and time consuming as a result small shops > catering to need of local communities have sprung up like mushrooms. ...but like almost any other success story in India, flipkart has become a recognizable brand despite this !! ...isn't that reason enough to undestand why the investors feel like this is going to be worth it ?
somehanu 12y ago
this is big. Indian people believes Flipkart how Americans believe Amazon. Flipkart delivery products quickly with replacement guarantee. This is enough for them to raise the funds.
skbohra123 12y ago
After Flipkart’s 1Bn fundraising, Amazon announces $2Bn investment in India[0] [0] http://www.medianama.com/2014/07/223-amazon-2bn-investment-india http://www.medianama.com/2014/07/223-amazon-2bn-investment-i...
anizan 12y ago
Some computer parts like hardisk's are cheaper on flipkart than the purchase price of an authorized retailer. So when a customer comes to a shop, the dealer says that stock will come in 2 days and he promptly places an order on flipkart.
- sameerds 12y ago
  The local dealer I shop with, uses flipkart as the reference price, and gives a discount on it! We browser right in his store and then reach a deal.
roguemonk 12y ago
I see 3 reasons. I. Flipkart is losing money definitely. But so is Amazon which has not reported a profit before last year. However Flipkart's losses are not for the same reasons as Amazon but it should not be forgotten that FK is never afraid to try out models and kill them if they fail. FK is following a lot of Amazon's footsteps but it is coming into its own quite a bit and given FK does not have to do the same mistakes that Amazon had to do for more than a decade, FK has a good second mover advantage. II. Flipkart has been a trailblazer in the Indian e-commerce space by forcing the users to internalize new habits. Getting them to trust the online e-commerce stores with their money and buying products online without a rethink, Cash on delivery and now 'online only sales'. Amazon.in is also being forced to innovate at its own pace in India changing its last mile delivery models (IBP stores). So right now this is anyone's game. III. Flipkart is simply bulking up its warchest on the impending war with Amazon. Neither of them are going to let go of the massive opportunity that they do not have any more in China. If Alibaba could do a single day $5.7 Bn sales on Nov 11, there is no reason to think why we might not be looking at a similar opportunity just as big in India where the human consumption potential is just as big! However, the more it looks like India will not be a winner takes all market. Amazon, Snapdeal and Flipkart will have to contend with being 3 players in a huge ecommerce market in India unlike China or US... the rules are just hatke in India :) Of course there are still the pristine south east Asian markets for everybody's taking!
chatman 12y ago
And immediately after this, Amazon invests $2B in India. http://www.amazon.in/gp/feature.html/ref=amb_link_182486107_1?ie=UTF8&docId=1000818573&pf_rd_m=A1VBAL9TL5WCBF&pf_rd_s=center-2&pf_rd_r=0MW8ZXJW9DHVBDWC8HRN&pf_rd_t=101&pf_rd_p=516940287&pf_rd_i=1592137031 http://www.amazon.in/gp/feature.html/ref=amb_link_182486107_...

164 points by dandrewsen 12y ago

hemantv 12y ago

$1 Billion is lot of money in India. Only future will tell what they will build from it.

epistasis 12y ago
$1B is a lot of money in the US too, even for a company's valuation. But to raise $1B is, well, astronomical.
- visakanv 12y ago
  India does have 1.2+ billion people! That must be part of the justification, surely.
  - TheIronYuppie 12y ago
    India is a huge opportunity, true. But nearly 30% of Indians live on less than $2/day. I do not believe these are part of that equation.
    - pessimizer 12y ago
      So 840M that live on more than $2 a day, then. That's around the combined population of the US and Europe.
      - adventured 12y ago
        The median per capita income in India is around $650. That places them around #100 in the world in that regard. The bottom billion people in India have less disposable income than the five million people living in Norway.
        onedev 12y ago
        You are thinking short term.
        adventured 12y ago
        I recognize India's potential, but my answer was about the near term indeed, a 5 to 10 year window. I personally wouldn't value a company further out than that.
        pessimizer 12y ago
        What about the top 200 million?
        adventured 12y ago
        Much like China, the top 100 or 200 million can be a very lucrative consumer market, absolutely.
        train_robber 12y ago
        You would also need to put into consideration cost of living. $650 would go a long way in India.
      - known 12y ago
        GDP (USD)...population...per-capita GDP US.......15.68T......313M.....$49,965 UK.........2.44T.......63M.....$38,514 China.....8.23T...1,351M.......$6,091 Nigeria....262b......168M......$1,555 India......1.82T...1,237M......$1,489 https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_cd&idim=country:AUS# https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&...!
- hrjet 12y ago
  But then it deals with physical goods; lots of inventory, physical ops, street-level marketing. Is $1B really high for such a company?
  - adventured 12y ago
    Yes, very high. Especially if the sales numbers thrown around in this thread are accurate (eg $500m to $1b in sales). Retail companies historically get relatively low valuations (particularly compared to your typical tech company), in part because the margins tend to be very mediocre in retail. A software company would typically have margins 5 to 10 times greater than most retail companies. Amazon has been an anomaly in this regard, while they have the terrible margins, they have been rewarded with a massive valuation.
- caseydurfee 12y ago
  They'd already raised over 800M before this round.
known 12y ago
Flipkart is NOT a profit making company as of today.

param 12y ago

Best of luck to both founders, and this is great news for the Indian startup industry, but I am confused by this statement: “We are not thinking about [an IPO]. We have not settled on a business model that we can take public,” Shouldn't the business model be validated by your Series A or max B? Flipkart has taken multiple rounds in the past, and this one looks as large as a Series C. Edit: Firms involved also sound like series C firms - Tiger Global, DST etc.

aashaykumar92 12y ago
I think their base model is validated, it just may need more. According to the TC article [1], "In a statement, Flipkart said the 'funds will be used to make long-term strategic investments in India, especially in mobile technology.'" So they are predicting some of these acquisitions to help grow that model before going public. [1] http://techcrunch.com/2014/07/29/indian-e-commerce-giant-flipkart-raises-massive-1b-round/ http://techcrunch.com/2014/07/29/indian-e-commerce-giant-fli...

netcan 12y ago

Wow. Is this real? Does anyone know anything about this company? Wikipedia has the company's revenue at 200m USD as of January, making an operational loss. They don't sell internationally. Is there some important part to this story that we're missing? Seems like there must be something worth knowing about here. On a slightly unrelated note, it's amazing that billions can be raised pre-IPO these days. It almost buries IPOs as a fund raising methods.I realize exit/liquidity was/is the bigger reason for tech IPOs already, but it seems somehow unnatural to completely abandon the role of financing. Not sure where I'm going with this.

gshahlot 12y ago
200m USD was in the FY 12-13. They hit $1B GMV around 4 months back.
- netcan 12y ago
  GMV?
  - swatkat 12y ago
    http://en.wikipedia.org/wiki/Gross_merchandise_volume http://en.wikipedia.org/wiki/Gross_merchandise_volume
  - deleted 12y ago
    [deleted]
- notahacker 12y ago
  That gives them 1/5 of India's entire ecommerce business (if the figures in the article about percentage of retail are accurate) which is not inconsiderable. On the other hand, since the gross margins on those sales won't be large, it also suggests that the volume of ecommerce carried out in India will have to grow by an order of magnitude (even if Flipkart can grow that large market share) if Flipkart is to earn a return on that huge investment. Bearing in mind the Indian middle class has been internet savvy for a while that's asking for a lot unless the investors are very patient.

2511 12y ago

I like that the Indian start up scene is getting serious now. Entrepreneurs are brave enough to compete with the big players unlike a few years ago when most start ups were basically simple web apps or a tech consultancy kind of thing. As an Indian this gives me hope that a soon the brain drain will stop and a lot of talented Indians abroad (with connections and some money to invest) will come back to India to either start up or work for one.

r_singh 12y ago
I really hope the same. There was a story on HN just a few days ago about an Indian from Cornell, who came back to India to do an India centric startup. Here's the story about why he chose to come back: https://news.ycombinator.com/item?id=8090158 https://news.ycombinator.com/item?id=8090158

fununclebob 12y ago

Flipkart recently moved away from the Amazon warehousing model to an online marketplace model and I've heard nothing but complaints from customers regarding the switch. Even their own presence in the marketplace is unable to keep up the quality of service as it scales, and all kinds of scammy retailers have set up shop now which has made it relatively more dangerous to purchase on their service now. Time will tell if they pay that billion back.

shankysingh 12y ago
I agree , from my personal experience, quality of their service has gone down since they moved to an online marketplace model. But from what I have heard on grapevine this was also a clever ploy to work around Indian law restrictions on FDI. This answer on quoara details it all. Please, take it with grain of salt. http://www.quora.com/Flipkart/What-could-be-the-reasons-behind-Flipkart-selling-WS-retail-to-Rajeev-Kuchhal http://www.quora.com/Flipkart/What-could-be-the-reasons-behi...
Pxtl 12y ago
So in other words, they tried to follow Amazon's "affiliates" business model but embraced it too hard because they didn't realize that everybody hates the affiliates and only ever buy from them on Amazon because of desperation or accident.
- barry-cotter 12y ago
  Or they saw the way taobao owns online B2C commerce in China and decided they wanted the Indian equivalent.
zhte415 12y ago
> Flipkart recently moved away from the Amazon warehousing model to an online marketplace model and I've heard nothing but complaints... Could be worth noting Taobao here. Starting as C2C (unlike Amazon / a warehousing approach) it has largely moved to a store-based approach (B2C). Given that Flipkart are moving towards B2C (via stores) it would be interesting to compare and contrast complements and conflicts the couple have in their respective markets.

akx 12y ago

Huh. Never heard of the company, but what surprised me is that the site is actually really fast and snappy, somehow, for me -- especially considering what I saw when I took a look at the source code.

swatkat 12y ago
As mentioned elsewhere in this thread, Flipkart is India-only as of now. They are India's Amazon :) I've been using Flipkart since its inception, never had any issues.
lovelearning 12y ago
What did you find in their source code?
- seanflyon 12y ago
  I assume he means their in browser JavaScript.
  - akx 12y ago
    Yeah, the HTML has bits of markup, JavaScript and CSS interspersed in a way that's hardly the state of the art for modern web dev.
Theodores 12y ago
Agreed. Very pleasing on the eye with clear navigation, puts Amazon slightly to shame.
- dheer01 12y ago
  You might find it hard to belive - but customer experience is slightly better on Flipkart than on Amazon(US).
- ilamparithi 12y ago
  Right. The filter options they have are much better than other e-commerce sites.

piyushpr134 12y ago

For the uninitiated: Flipkart is AMZN of India. They are doing tonnes of sales here. FK is getting so much valuation as India does not have a big enough organised retail (roughly 5%). This means there is a generation which would move on from unorganized retail to online. And hence the astronomical valuations. FK also has some unique ideas. For instance, they launched Moto e, g and x in India as exclusive sellers. They managed to sell 1 million of those phones in last 6 months. This alone would have easily resulted in a $20-25 million rev.

shimon_e 12y ago
20-25 million revenue? I think you left off a zero there.... Unless those phones only have an average price of $20-25 in India.
- ashray 12y ago
  He could mean net revenue for the retailer as in profit. I don't think these phones would have a margin much greater than $20-$25 ?
  - frandroid 12y ago
    Then that's called income, not revenue.
    - ashray 12y ago
      No need to downvote if you just disagree, that's not how HN is supposed to work :( It appears that you are using a different meaning for revenue. http://en.wikipedia.org/wiki/Revenue http://en.wikipedia.org/wiki/Revenue Revenue normally refers to top-line or gross income. This is why I clarified with the 'net-' addition, it's probably what led to the confusion in the first place. Flipkart nowadays anyway operates on a 'store' model for the most part so sales margin for this discussion could actually be meaningless anyway. But since they were doing an exclusive, perhaps they were directly selling, in which case it would be pertinent to the discussion.

quarterwave 12y ago

After my family started buying dresses online (average $20 per item), I started paying more attention. Online shopping in India not only provides a vast range across vendors, it also saves the cost and hassle of travelling to a big store - especially for singleton purchases. When discerning dress buyers are happy to buy online that must signal some kind of shift.

jestinjoy1 12y ago

The best part about Flipkart are 1. They made online selling popular in India 2. Products got delivered in door steps 3. I could buy books at 20%-50% discount and foreign edition textbooks easily. This is something we couldnt even dream about, in some parts of India 4. I could easily get products from lee, nike, puma,... at discounted price too. If you are not in a big city, then its difficult to get branded products and if you get then you need to worry about whether they are original or not I bought close to 150 books from Flipkart, which would cost some 70$ more if I buy from local sellers. I have my Toshiba Laptop, Moto G phone, Lee Shirt, Sennheiser Headphone, Reebok shoe all bought from online sellers :)

2511 12y ago
Also: 5) They implemented cash on delivery. A very brave and novel approach. This basically instilled confidence in the indian online buyer 6) Fast delivery. I will go ahead and say probably as good as Amazon or even better in big cities. They built warehouses in the big cities and stocked fast moving items in a lot of places 7) almost guaranteed savings on all things. I have rarely seen anything that is more expensive on FP compared to a store. 8) Good online experience. Little things like checking delivery using your pincode. Responsive site. Product suggestions.
- Grue3 12y ago
  How is cash on delivery novel? Where credit cards are not ubiquitous this is the only way to sell stuff online. Pretty much every single online store in my country did this for years.
  - 2511 12y ago
    Well..its India..too may practical issues that can dig into your profit
  - _nedR 12y ago
    Which country is that, if I may ask?
12y ago

techaddict009 12y ago

Flipkart revolutionized ecommerce in India with the concept of COD (Cash On Delivery). That is you pay when you receive the product.

tn13 12y ago
That is not true at all. Various other companies had COD long before Flipkart. Also, COD does not work in India. http://forbesindia.com/article/briefing/cash-on-delivery-doesnt-work-for-companies/33626/1 http://forbesindia.com/article/briefing/cash-on-delivery-doe...
agyli 12y ago
I used to buy things from eBay India using CoD in 2004. Flipkart was not even founded at that time. I know lot of people who were afraid to buy things from ebay even though ebay offered buyer protection for long long time. In my opinion, Flipkart is successful in India because they created trust among people who were afraid (based on false rumors) to buy things online.

tn13 12y ago

I find Flipkart's valuation very puzzling clearly the investors have seen what I haven't. Flipkart's revenue is extremely less for a population of the size of India. They makes ~$200M in revenues per year with an operational loss which I am told is significant. Flipkart has managed to scale its revenue but without making a profit. Even this would have appeared as a good opportunity if Flipkart was kind of de-facto e-commerce business in India. Turns out that it is not. Snapdeal, Junglee (Amazon India) are pretty close. Myntra was the leader in apparel and fashion products sale online which was then acquired by Flipkart. (Myntra was not profitable either). I find it hard to understand why anyone believes that Flipkart would ever make profit in next 5 years or so. I find it hard to believe. Unlike USA, India has not yet figured out how to build proper usable roads, the cities are not planned and India does not have a proper addressing system. Government regulations have further made life difficult for courier companies. All this has resulted into cities and towns where traveling over few kms is very expensive and time consuming as a result small shops catering to need of local communities have sprung up like mushrooms. Current India is probably resembles more to the A&P days of USA. My assertion is validated by the fact that Travel Booking and Movie ticket booking websites in India are growing fast and also very profitable.

devnonymous 12y ago
I find people's (especially Indian's) puzzled reaction to news about flipkart's funding puzzling. Flipkart has altered the online buying habits of urban Indians significantly. I would be surprised to meet an urban Indian today who has not heard about flipkart. By urban I mean the tier 2-3 cities as well. So is it just the fact that the current revenue numbers do not add up that makes it puzzling to some (most??) ? If I was an investor, I'd bet on flipkart, solely based on watching the change in spending habits of the urban Indians over the last 5 years. Instead on narrowly focusing on the online business if you take a broad look at the way things are changing the tier 2/3 cities in India you'll understand the investor optimism. You mentioned: > Unlike USA, India has not yet figured out how to build proper usable roads, > the cities are not planned and India does not have a proper addressing > system. Government regulations have further made life difficult for courier > companies. All this has resulted into cities and towns where traveling over > few kms is very expensive and time consuming as a result small shops > catering to need of local communities have sprung up like mushrooms. ...but like almost any other success story in India, flipkart has become a recognizable brand despite this !! ...isn't that reason enough to undestand why the investors feel like this is going to be worth it ?

somehanu 12y ago

this is big. Indian people believes Flipkart how Americans believe Amazon. Flipkart delivery products quickly with replacement guarantee. This is enough for them to raise the funds.

skbohra123 12y ago

After Flipkart’s 1Bn fundraising, Amazon announces $2Bn investment in India[0] [0] http://www.medianama.com/2014/07/223-amazon-2bn-investment-india http://www.medianama.com/2014/07/223-amazon-2bn-investment-i...

anizan 12y ago

Some computer parts like hardisk's are cheaper on flipkart than the purchase price of an authorized retailer. So when a customer comes to a shop, the dealer says that stock will come in 2 days and he promptly places an order on flipkart.

sameerds 12y ago
The local dealer I shop with, uses flipkart as the reference price, and gives a discount on it! We browser right in his store and then reach a deal.

roguemonk 12y ago

I see 3 reasons. I. Flipkart is losing money definitely. But so is Amazon which has not reported a profit before last year. However Flipkart's losses are not for the same reasons as Amazon but it should not be forgotten that FK is never afraid to try out models and kill them if they fail. FK is following a lot of Amazon's footsteps but it is coming into its own quite a bit and given FK does not have to do the same mistakes that Amazon had to do for more than a decade, FK has a good second mover advantage. II. Flipkart has been a trailblazer in the Indian e-commerce space by forcing the users to internalize new habits. Getting them to trust the online e-commerce stores with their money and buying products online without a rethink, Cash on delivery and now 'online only sales'. Amazon.in is also being forced to innovate at its own pace in India changing its last mile delivery models (IBP stores). So right now this is anyone's game. III. Flipkart is simply bulking up its warchest on the impending war with Amazon. Neither of them are going to let go of the massive opportunity that they do not have any more in China. If Alibaba could do a single day $5.7 Bn sales on Nov 11, there is no reason to think why we might not be looking at a similar opportunity just as big in India where the human consumption potential is just as big! However, the more it looks like India will not be a winner takes all market. Amazon, Snapdeal and Flipkart will have to contend with being 3 players in a huge ecommerce market in India unlike China or US... the rules are just hatke in India :) Of course there are still the pristine south east Asian markets for everybody's taking!

chatman 12y ago

And immediately after this, Amazon invests $2B in India. http://www.amazon.in/gp/feature.html/ref=amb_link_182486107_1?ie=UTF8&docId=1000818573&pf_rd_m=A1VBAL9TL5WCBF&pf_rd_s=center-2&pf_rd_r=0MW8ZXJW9DHVBDWC8HRN&pf_rd_t=101&pf_rd_p=516940287&pf_rd_i=1592137031 http://www.amazon.in/gp/feature.html/ref=amb_link_182486107_...