STARTUP NAME- FLIPKART.

COM
FOUNDERS SACHIN BANSAL & BINNY BANSAL

CASE INTRODUCTION

An invention of WWW has revolutionized every domain of the world and taught us to do
business in a unique way. Today with 3.19 billion Internet Users across the world of which
2.5 million in India (ranked 3rd among number of users) itself it has become a hotspot for
investors. As we see the developed countries like USA, UK are seeing a industrial life cycle
to be in saturation stage whereas in developing countries like China and India they are still in
infant stage. Today India has become a prime market for giants like Amazon , eBay. Indias
household name Flipkart is in with a mission. Its recent moves like Billion Day Sale and
acquisition of Myntra has been subjects to ponder upon.
( The acquisition of Myntra (Indias largest fashion e-tailer) by Flipkart (Indias biggest e-tail
company) brought together two of the biggest e-tailers in India. This acquisition made
possible by common investors, the acquisition would enable Myntra to leverage on Flipkarts
infrastructure, while allowing Flipkart to strengthen its portfolio of product offering and
outbound distribution logistic)(1). The acquisition is being looked upon as a step towards,
forward as well as horizontal integration and exploiting the operational synergy generated
thereby. This consolidation is seen as a response to taking on Amazon which has made big
plans for Indian market, to get a competitive advantage.
1. TaslimaKhan ,Flipkart buys Myntra: A deal which is win-win for both , Business
Today ,May 2014 http://businesstoday.intoday.in/story/flipkart-buys-myntraimpact-on-fashion-e-retail-sector/1/206484.ht ml (accessed on 5th September
2014 at 7 :00 pm)

(22nd May 2014 would be remembered as one of historic days in the e-commerce industry of
India. In the Myntra Headquarters at Bangalore the companys co founders and chief
executive Mukesh Bansal revealed the buy out of his firm by Flipkart. He briefed the media
for the announcement with the introduction of his two new colleagues Sachin and Binny
Bansal, the founders of Flipkart. The three briefed about Myntra becoming a part of Flipkart
but would continue to maintain its identity. They added that the deal was finalized in
Singapore in Flipkarts quarterly board meeting held from 15th May 2014 to 20th May 2014.
Sachin Bansal (Flipkarts Founder Member) said "Myntra is the leader in fashion today and
we would love to work with and learn from Mukesh and Myntra."Apprehensions started
coming forward when reports came out of Mu kesh Bansal joining the Flipkart and heading
the fashion segment of both the entities)(2)

AlokSoni, Everything you wanted to know about the Flipkart -Myntradeal

,Youstory.com
May
2014
http://yourstory.com/2014/05/flipkart-myntraacquisition/ (accessed on 6th September 2014 at 8:00 PM

In several reports which come forward Economic Times quoted A holding company has
been formed in which the founders of the two companies and their investors will hold stakes,
according to multiple people who have direct knowledge of the deal. The employees who
have stock options will also get a stake in the holding company. Myntra's policy of universal
employee stock options will continue.Arvind Singhal, Chairman of Technopak Advisors Pvt.
Ltd., said, The Flipkart and Myntra merger will create the first Indian e-tailing powerhouse,
and provide a big fillip to India's still nascent but very promising e-commerce
industry.However, not all experts were of the same view. Mahesh Murthy, co-founder of
Seedfund , said, While this (deal between Flipkart and Myntra) may be good for investors, it
might not be so good for the entrepreneurs and staff of these companies. Swati Bhargava,
cofounder of Cashkaro.com , said ...Consolidation of top two out of five players is probably
not great from a customer perspective. It reduces competition and perhaps incentive for
continual improvement.

ENTREPENEURS
Sachin Bansal (born August 5, 1981) is an Indian Software engineer and Internet
entrepreneur, known for co-founding India's largest e-commerce platform Flipkart. Sachin is
from Chandigarh and is a dropout from Indian Institute of Technology Delhi. Early life.
Sachin Bansal is originally from Chandigarh, the capital city of Punjab and Haryana. His
business partner, Binny Bansal, is also from Chandigarh. Although they share the same last
name, they are not related. They both completed their schooling at St. Anne's Convent
School, Chandigarh and coincidentally, were students of computer science engineering
at Indian Institute of Technology Delhi. Flipkart is an e-commerce company founded in 2007
by Sachin Bansal and Binny Bansal. It is a Singaporean company which operates in India, where
it is headquartered in Bangalore, Karnataka.[4] Flipkart has launched its own product range under
the name "DigiFlip" with products including tablets, USBs, and laptop bags. [5][6][7]
In May 2014, Flipkart received $210 million from DST Global, in July 2014 it raised $1 billion led
by existing investors.

Career
(Bansal failed in his 1st year and decided to do something different than
pursuing degree. He ultimately dropped out of IIT in 2005 and joined a
company called Techspan where he served for a few months. In 2006, he
joined Amazon.com India as Senior Software Engineer. Binny Bansal also
worked at Amazon.com India at this point. They initially thought of
starting a comparison search engine, but realized that the market for Ecommerce in India was very small. Hence, after leaving Amazon in 2007,
they founded Flipkart as an e-commerce company.)(3)

ShradhaSharma,Did you read between the lines of Flipkart and Myntra

deal?
Entrepreneurs
dont
miss
this,
May
2014
http://yourstory.com/2014/05/flipkart-myntra-deal/ (accessed on 6th
September 2014 at 8:20PM)

Awards and Recognition

In September 2015, Sachin Bansal along with co-founder of

Flipkart, Binn Bansal, was named the 86th richest in India for a
net worth of $1.3 billion by Forbes India Rich List.

Entrepreneur of the year - ET Awards (2012-2013)

ENTREPRENEURIAL JOURNEY
It was a 10,000-a-month allowance from their parents for almost 18 months that helped
Sachin Bansal and Binny Bansal launch an e-commerce website retailing books in October
2007. Today, the near-20% stake they hold, along with the top management, in flipkart is
valued at almost Rs 2,000 crore.
(Sachin Bansal, the chief executive of Bangalore-based Flipkart, says he has a knack for
underestimation. That is exactly what happened in March 2011 when he and Binny Bansal,
who are not related to each other, announced they would reach the $1-billion (Rs 6,100-crore)
sales mark in 2015. The site, which now sells everything from books to electronics, apparel
and jewellery, reached the milestone, a full year ahead of the target.)(4)

"To say billion-dollar in 2011 was crazy when we were doing a $10 million (Rs 61 crore) run
rate," says Sachin, 32, in his first interview after the firm achieved the sales target. "It was
just a belief."
Sachin, like his co-founder, grew up in Chandigarh. That is not the only coincidence. Both
went to IIT-Delhi and worked at different companies for about a year before ending up in the
same team at Amazon. It was during this stint that the two decided to start up.
The two are demanding bosses, say their employees. "Both have high expectations, but that
raises our bar. That makes working with them rewarding as well," says Amod Malviya, head
of engineering at Flipkart. He says the Bansals have complementary personalities. While
Binny is analytical and driven by logic, Sachin is more instinctive and is driven by emotion
and passion, says Malviya, who joined the company in 2010 as a senior manager.
Employees are also impressed by the simplicity the duo has managed to retain. As they live
close to work, both walk to office. They also fly and stay budget while travelling and eat with

other employees whenever possible. "They are very much in the Azim Premji mould and shy
away from ostentation," says an employee, who did not want to be identified.
(Experts say the success of Flipkart can be chalked down to the founders' attitude. "The two
have the right attitude. They are cocky and confident, and along with that they have the
ability to execute," says Arvind Singhal, chairman of retail consultancy Technopak. This
attitude has helped them deal with the ever-shifting baselines in Indian ecommerce.)(5)
Flipkart&Myntra Merger Is a Done Deal; FlipkartTo Raise Another Round of Funding,
nextbigwhat.com
http://www.nextbigwhat.com/flipkart-acquires-myntra-funding-297/
(accessed on 10th September 2014 at 8:30PM).

Supam Maheshwari, founder of online babycare site Firstcry, says Sachin and Binny Bansal
managed to find early investors who kept backing them. "They executed well, especially in
logistics and warehouse, and did not lose focus," says Maheshwari. "But they have had to
spend a lot to reach the billion-dollar mark."

Enterprise

The domain name www.flipkart.com (hereinafter referred to as "Website") is owned by

Flipkart Internet Private Limited a company incorporated under the Companies Act, 1956
with its registered office at Vaishnavi Summit, Ground Floor, 7th Main, 80 feet Road, 3rd
Block, Koramangala Industrial Layout, Next to Wipro office, Corporation Ward No. 68,
Koramangala, Bangalore - 560 034, Karnataka, India (hereinafter referred to as "Flipkart").
The 30-something founder-promoters of Flipkart, Sachin Bansal and Binny Bansal (not
related to each other), on Tuesday scripted the biggest consolidation in the Indian ecommerce market, buying out rival company Myntra. The Bansals, who had started as
executives in Amazon, before founding Flipkart in 2007, are believed to have opted for the
Rs 1,800 crore ($300-million) stock-and-cash deal due to growing competition from the
American
online
major.
The

value

of

the

combined

entity

is

pegged

at

more

than

$2

billion.

(While Flipkarts Bansals dismissed any threat from Amazon, saying Chinas Alibaba was
more its kind, Myntra chief executive Mukesh Bansal, also in his 30s (not related to
Flipkarts promoters), said the deal was a way to reach the top in the fashion space) (8)

Amazon's
Perfect
Timing
for
India
,
Forbes
India
Jul
2,
2013
http://forbesindia.com/article/bigbet/amazons-perfect-timing-for-india/35517/1 (accessed on
10th February 2014 at 8:30PM)

BUSINESS MODEL

Indias largest e-commerce firm Flipkart Ltd. is considering a plan to reduce commissions
charged to its third-party sellers and diversify its business model by adding advertising,
payments and other services starting this year, three people familiar with the matter said.
Flipkarts plan is based loosely on the business model of Chinas e-commerce giant Alibaba
Group. The Chinese firm charges low commissions on one platform and offers free listings
on another to sellers, but makes money through ads, logistics, payments and other services.
The company wants to reduce commission rates over time and encourage sellers to plough
back the savings into advertisements, logistics and other services, according to the three
people cited above, all of whom spoke on condition of anonymity. It has already launched a
mobile ads service and plans to introduce a new payments service later this year, they
said.The company, which has been trying to move to a marketplace model since 2013,
currently charges third-party sellers commissions ranging from 5-20% on every order.
Commissions on apparel are higher than those on electronics and books. These commissions
vary based on the products Flipkart is trying to push. Lowering commission rates may
potentially allow the company, which has more than 40,000 third-party sellers, to attract
thousands of small businesses.
Ad revenue can be generated in three ways: by selling so-called banner and other ads where
all kinds of consumer brands advertise to Flipkart users; by getting brand partners such
as Xiaomi to spend on marketing on the shopping app; and by charging fees for promoting
products of third-party sellers. For instance, a third-party seller can pay to have its goods
shown first when a shopper uses certain keywords to search on the app; if a user searches for
casual shoes, a seller can ensure its products are shown prominently by paying extra.
(Flipkarts move towards a diverse revenue model is the third transformational change the
company is trying to effect in the way it operates. Over the past six months, it has been
accelerating a shift to the marketplace model from an inventory-led business. The company
may also do away with its website and become an app-only retailer starting September to
dominate mobile commerce, according to various media reports) (9).
(Since Flipkart gets more than 70% of its traffic from its mobile app, shutting its desktop
platform may potentially force the rest of the shoppers to switch to the mobile app)

(10).

The

firm, which has a user base of more than 30 million, is betting that getting more shoppers on
the mobile will, in turn, prompt advertisers such as Hindustan Unilever Ltdand Samsung to
shift their spending towards its app.

Transforming a company is possible, and technology giants like Amazon and Google are
good examples of how to move into new businesses in a swift and sure manner, said Raja
Lahiri, partner at Grant Thornton India, a consultancy. Adding revenue streams like ads
makes a lot of sense for a large e-commerce firm because it has a large audience that can be
monetized. Moving from an inventory business, though, can be a complex process because it
requires resetting relationships with vendors, which isnt a simple task.
As Flipkart moves into ads, some of its rivals will have the advantage of tapping Chinas
Alibaba for advice.
International Journal of Management and International Business Studies. ISSN 2277-3177
Volume

4,

Number

(2014),

pp.

71-84

Research

India

Publications

http://www.ripublication.co m
Value Proposition

Market Segment
1. Womens.
1.100% certified service 2. Potential Customers.
providers.
3.Potential employers.
2.Provide product according
to customer wants.

Value Chain
1 Aggregate quality suppliers
and
ensure
availability,
quality and reliability.
2. Ensure your safety by
doing a complete background
check
on
our
service
providers
for
address
verification.

Revenue Model
1. Online e-commerce
2. digital advertisement.
3. If any damage occurs due
to a service provider error,
we change the product with in
7 days.

Growth Strategy
1. Offer competitive prices
without compromising our
workmanship and quality.
2. provide products at your
door.
3. capture wide online
market.

Competitive Strategy
1. Focus on Quality of
services.
2. The pricing is absolutely
transparent with no hidden
costs and mentioned upfront
for the job.
3. Focused on creating
incomparable experience of
the customers.

Opportunity framework

(E-commerce in India is a land grab opportunity. They see an opportunity in almost every
category. The expansion is limited only by our capabilities because the market is huge.
Reliability and scalability on the supply side are the main things)

(11).

They are already in

most categories. What flipkart looking forward to is (selling) large itemslarge electronics,
refrigerators, TVs, washing machines, furniture, large sporting gear. There is a very big
market for heavy, bulky items. they dont focusing on how to solve it. It requires a different
supply chain investment and we are going to make it. Another category is fashion. We are in
it but we can make it huge. In India, the market for clothes and shoes is bigger than
electronics.
Google:opportunity for flipkart.

Initial challenges
The initial challenges we faced were teething troubles common to most start-ups. It was
tough to generate supplier confidence in us and the inability to keep a large enough inventory
posed an issue. Slowly however, we succeeded in building up both customer and supplier
confidence. Traffic to the site started picking up through word-of-mouth publicity and from
then on there has been no looking back. Today, the challenges are different. They have built
our business on the premise of providing a great shopping experience to the customer and our
biggest challenge is to maintain the same quality of service while we rapidly scale up the size
of our operations. The other challenge is to think big; in terms of scales that are yet to be
employed in online retail businesses
STRATEGY
Flipkart business model is much deeper and much expansive that could possibly elaborate
here.However,afewkeypoints.

Rationalized supply chain - Inbound logistics

Strategic warehousing and distribution capability - Operations

Well aligned fulfillment process - Outbound logistics

All the three processes are extremely well integrated - first by a sound strategy, around which
the organizational structure is built So they have a strategy, and a complementing structure to
support their strategy. The third critical success factor for Flipkart is the technology as an
enabler. A strong information systems is at the core of the organization, which drives
visibility and end-to-end integration across their supply chain processes (inbound - operations
- outbound) resulting in a well lubricated efficient machine. (Flipkart, must be seen as a
logistics company rather than a retail business. Although it sells products to consumers, and
hence is academically classified as a B2C business, the core of the business lies in its efficient
logistics,

which

allows

it

to

sell

products

at

attractive

prices)

(12).

However, its competitive advantage is not in its retailing capabilities. Infact that aspect other
e-commerce business is easily imitable and hence not sustainable. The sustainable
competitive advantage of Flipkart, lies in its logistics and operations infrastructure - which
has a very high barrier to entry: owing to its extensive capital investment and difficult to
replicate strategy-structure-culture mix.
Amazon's

Perfect

Timing

for

India

Forbes

India

Jul

2,

2013

http://forbesindia.com/article/bigbet/amazons-perfect-timing-for-india/35517/1 (accessed on
10th February 2014 at 8:30PM)

LEARNING
-In the current era of information technology, e-retail industry across the globe has become
one of the most emerging industries. Indian market where brand awareness is squite high but
availability of brand is relatively low, the opportunity for e-retail industry is huge. In last few
years Indian e-retail industry has witnessed a lot of domestic players like Flipkart, Myntra,
and Snapdeal etc. But with the entry of a global player like Amazon in the Indian e-retail
industry becomes competitive and Indian players like Flipkart, Myntra, Snapdeal are
supposed to face stiff competition. In such scenario two Indian biggies, Myntra and Flipkart
have taken the strategic move of consolidation to take on Amazon.This acquisition is very
significant from strategic point as well as synergy generation point. If we look into the
strategic perspective of acquisition, definitely it has given Flipkart an upper hand over

Amazon. In terms of competitive advantage, the market share and penetration of Flipkart has
been increased. With this acquisition Flipkart now gets an edge over its competitors in the
fashion apparel segment. We analyzed the synergies generated from this acquisition, and saw
that there is both financial & operation synergies been generated for Flipkart.

ALL SOURCE:

Taslima Khan , Flipkart buys Myntra: A deal which is win-win for both , Business
Today ,May 2014
Alok Soni, Everything you wanted to know about the Flipkart - Myntradeal
,Youstory.com May 2014
Why Flipkart and Myntra Should Explore Synergies. Next Big What
http://www.nextbigwhat.com/flipkart-myntra-explore-synergies-297/
(accessed on 11th September 2014 at 8:10PM
Why Flipkart and Myntra Should Explore Synergies. Next Big What
http://www.nextbigwhat.com/flipkart-myntra-explore-synergies-297/
(accessed on 11th September 2014 at 8:10PM) ShradhaSharma,Did you
read between the lines of Flipkart and Myntra deal? Entrepreneurs dont
miss this, May 2014 http://yourstory.com/2014/05/flipkart-myntra-deal/
(accessed on 6th September 2014 at 8:20PM) Flipkart&Myntra Merger Is
a Done Deal; FlipkartTo Raise Another Round of Funding, nextbigwhat.com
http://www.nextbigwhat.com/flipkart-acquires-myntra-funding-297/
(accessed on 10th September 2014 at 8:30PM) Amazon's Perfect Timing
for
India
,
Forbes
India
Jul
2,
2013
http://forbesindia.com/article/bigbet/amazons-perfect-timing-forindia/35517/1 (accessed on 10th February 2014 at 8:30PM)

GOOGLE , WIKIPEDIA.