Sachin & Binny Bansal: The men that brought supermarts on your finger tips
“To SHOP is human, to shop online is DIVINE !!” Flip Quote
Flipkart is the biggest made in India online store selling almost everything on the Internet in India. It is one of the biggest competitors of Amazon in India, which is the biggest e-commerce website in the world. Flipkart is the initiative and founded by two Indian entrepreneurs – Sachin Bansal and Binny Bansal. Flipkart has given India his one of the biggest startup success story.
Back in 2007, when Flipkart was launched, the Indian e-commerce industry was taking its beginner steps. The company is registered in Singapore, but its headquarters are in the city of Bangalore, India. Flipkart, a company that started with a mere investment of Rs. 4, 00,000 to develop its website, has undoubtedly grown up to be one of the biggest e-commerce players in the Indian peninsula. In this fast pacing world, a shortage of time is a big crisis and acts as a big push for consumers to shop online. In this article, we will venture into how the company grew in such a short period.
Flipkart has had a long road over the years, full of ups and downs. What started as an online bookstore from a two-bedroom apartment in Koramangala, Bengaluru in 2007 has today grown into one of the biggest companies in India, and an incredible example of the success potential for Indian startups. Founders Sachin Bansal and Binny Bansal (not related) have become celebrities in their own right, setting examples for other aspiring entrepreneurs to aim for.
As Indian e-commerce’s biggest success story celebrates the crowning moment of its journey so far – a $16 billion acquisition by Walmart, the world’s largest retailer, in the biggest M&A deal ever in the Indian startup ecosystem – we take a look back at the biggest milestones in Flipkart’s 10-year journey thus far:
Flipkart was founded by Mr. Sachin Bansal and Binny Bansal, alumni of the Indian Institute of Technology Delhi, in October 2007. In its initial phase of operation, Flipkart was registered as Flipkart Online Services Pvt. Ltd and sold only books. Co-Founder of Flipkart and achiever of Entrepreneur of the Year Award 2012-2013 from Economic Times, Mr. Sachin in an interview acknowledged that how he thought to found the company was the most ridiculous thing he has ever done and how others around him thought he was insane doing so. Soon, the company grew bigger and ventured into selling other products such as electronic goods, e-books, stationery supplies, fashion and lifestyle products as well.
Sachin Bansal was born on 5 August 1981 in Chandigarh. He went to the St.Anne’s convent school and was a topper from his schooling days. His father was running a business and mother was a homemaker. He went to one of the most prestigious engineering colleges of India and graduated as a Computer Science Engineer from the Indian Institute of Technology (IIT), Delhi in 2003. An IIT graduate has a sparkling bright future mostly and it is the same case. Sachin got a job in Techspan and later in 2006, he joined Amazon.com as a senior software engineer. By the way, he always wanted to become a professional gamer. In 2005 at IIT-Delhi, Sachin Bansal and Binny Bansal met each other and both became employees at Amazon.
When both Sachin Bansal and Binny Bansal was living a quite successful life working for the biggest e-commerce company, they started to dream big. They quit their jobs at Amazon in 2007, to start a similar e-commerce company in which they are working before. They wanted to give a made in India online store to Indians and so they started India’s e-commerce website, Flipkart. Flipkart was launched in October 2007 by Sachin Bansal and his business partner Binny Bansal. They also started by selling books online as Jeff Bezos did in the case of Amazon (Read story of Amazon here). They are not having a new idea but they are having guts to expand this idea in a nation where there is not so much knowledge of the internet among common people and people – Indians having a trend to touch and feel whatever they buy. They used the opportunity that India was not aware of the e-commerce market at that time.
In the first few years of its existence, Flipkart raised funds through venture capital funding. As more and more consumers turned to Flipkart for shopping, investors turned to Flipkart to support the company’s future strategy. The company raised US$1 million in 2009 from venture capital funds Accel India, and later on US$10 million in 2010 and US$20 million in June 2011 from Tiger Global. But the company took everyone by surprise when it announced that it raised $1 billion from already existing investors including Tiger Global Management LLC, Accel Partners, and Morgan Stanley Investment Management and a new investor Singapore sovereign-wealth fund GIC.
New York-based private equity company Tiger Global Management LLC is the largest investor in the company today. Till today, the company has privately raised about $2.7 billion in multiple rounds of funding.
As the company grew in stature, more funding arrived. Flipkart repaid the investors’ faith with terrific performances year after year. In the financial year 2008-09, Flipkart had made sales to the tune of 40 million Indian rupees. This soon increased to 200 million Indian rupees the following year.
Their last round of Fundraising had increased their value to $ 15 billion, however, as of February 2016, according to Morgan Stanley, their estimated value stands at $11 billion.
Back at the time when Flipkart was launched, any e-commerce company faced two major difficulties. One was the problem of online payment gateways. Not many people preferred online payment and the gateways were not easy to set up. Flipkart tackled this problem by introducing cash on delivery and payment by card on delivery in addition to others. Flipkart was the first to implement the popular ‘Cash On Delivery’ facility, which every online shopping website in India offers as an option today.
The second problem was the entire supply chain system. Delivering goods on time is one of the most important factors that determine the success of an e-commerce company. Flipkart addressed this issue by launching its supply chain management system to deliver orders in a timely fashion. Today as it stands, Sachin Bansal is the Chairman of the company and Binny Bansal is the CEO of Flipkart.
Flipkart also acquired few companies like Myntra.com, LetsBuy.com, etc., to better their presence in the market. With the entry of Amazon.com in India, the competition between the companies has seen many takeovers. Flipkart’s journey from a small book e-retailer to India’s largest e-commerce platform inspires a generation of start-ups. In a country where stereotypes are common, Flipkart managed to break the norm and change the e-commerce industry in India forever. Flipkart’s story proves that if you have a great idea, and you are a doer and not a thinker, success is not far off.
The bigger you grow, tougher the challenges you face and harder it becomes to overcome them. The same fall in line for Flipkart. In its early stage, two major challenges encountered were to get book vendors on board with Flipkart as it didn’t have a book store and then to obtain the approval for an online-based credit card payment gateway. The founders however faced every challenge head-on! Sachin recalls how he and Binny used to stand outside Gangaram Book Stores, Banglore and hand over Flipkart bookmarks to only those who were coming out with books in hands; to ensure that their target was correct. They had to make several assumptions and start slowly by building good business relations with consumers and suppliers. Sometimes these assumptions would turn out to be wrong and they would need to change the direction. But every time they committed a mistake, it taught them a lesson.