In an exclusive interview with Business Standard, Flipkart, one of the leading online retailers in the country looking to achieve revenue of Rs500 crore in current financial year and at the same time hopes to touch the mark of $1 billion (Rs 5,000 crore) in the next two to three years, much ahead of the company’s 2015 target. “In terms of revenue, we are looking at Rs 500 crore to Rs 600 crore in the current financial year,” said Sachin Bansal, Filpkart co-founder and chief executive officer (CEO).
Flipkart started back in 2007 with an investment of $9,000, by Sachin Bansal and Binny Bansal both from the Indian Institute of Technology-Delhi (IIT) and with prior experience in Amazon. The Bangalore-based firm ships close to 30,000 items per day. In meantime, Flipkart has since then raised rounds of funding from venture capital funds Accel India in 2009 and Tiger Global Management (up to the tune of US$20 million) in 2010 and 2011.
Although the company is making profits per transaction, it is in the red at an operational level due to big ticket size investments being made in areas such as technology, supply chain, logistics, customer support and marketing to scale up the business. Flipkart’s warehouses are located in Bangalore, Chennai, Delhi, Kolkata, Mumbai, Noida and Pune.
According to Bansal, the industry growth will escalate with the entry of serious players like Amazon. He nonetheless denied there were any exit plans. “Selling our business does not feature in our future plans. In fact, we intend to establish Flipkart as the largest retailer in the country,” he said.
The e-commerce industry is expected to grow by 47 per cent in 2011 to reach Rs 46,520 crore by the year-end, according to a report by the Internet and Mobile Association of India. The number of e-commerce users is nailed at 10 million.
At present Flipkart offers 13 including recently added computer peripherals, kitchen appliances, televisions, home theatre systems etc. to its product range to diversify further. To go up further in the value chain, it is looking at associations with a larger number of suppliers and partners. Talking about Flipkart expansion plans for 2012 and in the next couple of years, Bansal said that we will look at bigger investments in our supply chain and technology. This should result in larger warehouses and increased automation of our processes.
“With increased attention from the government, private players and investors alike, more and more companies are entering this market. As the industry matures, there should be some consolidation with the emergence of larger and better established players,” added Bansal.