Flipkart raised $200 mn from investors and announced it yesterday. The company is likely to clock $500 mn in gross merchandise value this year and is targeting $1 bn in 2015. It shipped 1.5 lakh orders on a single day last year. That’s over 1.7 orders a second. At the heels of Amazon’s launch in India, Flipkart pared excesses and upped its product focus. The company doubled down on its fashion business, shut its music business Flyte and launched a payment gateway #payzippy. On a conference call on Wednesday, Sachin Bansal, the Co-Founder & CEO of Flipkart talked about the company’s future plans, the growth of e-commerce market and government regulations. Edited Excerpts:
How is Flipkart growing?
We have almost reached one crore users (10 mn) on Flipkart. We are still on target to achieve $ 1bn Gross Merchandise Value (GMV) by 2015. I’m happy to announce that we are more than half way there towards that goal on a run rate basis. We get more than 10 lakh or a million unique users a day. From a shipment velocity point of view, we want to scale up 3-4x our current velocity in 2 years. Marketplace was an experiment that’s taken off better than what we expected. We have more than 500 sellers and some of them are even facing supply chain issues now. Some of them are getting to 1000s of shipments a day at peak. We are working with them to solve that. We are at an early stage.
State of the e-commerce market?
E-commerce was about $1 bn in gross merchandise value in 2012. That, according to Technopak is set to become $76 bn by 2021. We believe that is going to happen. The reason is that 30-40% of India will be online with mostly 3G users.
Mobile will most likely be a superset of PC users at the time.
As the size of retail becomes bigger and e-commerce becomes better with the ecosystem around e-commerce (packaging, logistics, payments), we believe that $76 bn is possible.
What’s the total investment you have raised so far from venture capitalists ($380mn?)?
We have not talked about that so far. Total investment size is something that doesn’t matter. What’s important is that we have been able to raise funds at a strategic point in our business. Our fund raising has been growing as we have been growing. The reason is that we are seeing bigger and bigger opportunities. In 2007, we had no idea where this could be. In 2011, we said billion dollar possibility by 2015. Today we see bigger opportunities and we need investment to go there.
What is the valuation at which you have raised the funds?
Again, like I said: I think we are at billion dollar overall market size last year. valuations don’t matter at this point. Binny and I are thinking long term and our investors are thinking very very long term. They are very patient.
What regulatory issues do you face?
Suddenly, it has become a big sector. Government had not thought about it. There was not much clarity on the policy side. THat includes FDI, Tax regulations and other things that affect us. The good part about this is that the regulatory bodies and policy makers are very interested in knowing more about the sector. We are working with trade bodies and government to make them understand our needs, what we can become and there is a long way to go. WE are confident.
Where are we between the Government and Flipkart?
We are a large operations. Government bodies have questions from time to time. We are committed to answering them and being compliant. When the laws are not favorable, we will work with the Government.
Lots of questions around Flipkart & Growth of Indian E-commerce Market..
There have been a lot of questions being asked of e-commerce in India. Like for instance, are the Indian companies building e-commerce the right way, is it the right strategy, is the sector viable? There are a lot of regulatory issues and other kinds of pressure. There has been a lot of skepticism around the space and Flipkart.
This is a validation for India’s growth story that new sectors can come up in India.
Its a validation to the e-commerce industry itself. That it has potential and is healthy. Its a validation of our thoughts and our ways.
Why does Flipkart enter late into categories?
We believe that its not late. We have to balance our supply chain and the demand. So far we have had the right timing. Whether it has been electronics, books or fashion.
Watch Sachin Bansal’s UnPluggd conversation