Have Flipkart founders read the writing on the wall?
How often do we see an Indian startup becoming a billion-dollar company within a decade of its inception? The answer is once in a blue moon. Flipkart is one such e-commerce giant which not only became a billion-dollar company rather it was privileged with the title of “Amazon of India” in less than a decade of its operation. Both Flipkart and Amazon had started off their journey being online sellers of books. Both have covered a long distance from being online retailers which used to sell books in its inception to becoming online platforms which cater a millions of products and services. Flipkart was founded by two IIT techies Sachin Bansal and Binny Bansal in the year 2007 when startup was not thought to be cool among young graduates and degree holders. Moreover, establishment of the company was done with a meagre four lakh rupees which was the saved amount of pocket money they used to get. They used this amount to build a website. After many rounds of funding from couple of venture capital funds which included the likes of Accel India and Tiger Global among others, it was able to market itself as the Amazon of India.
Flipkart was climbing ladder of success by leaps and bounds before acquisition by Walmart. According to a prediction, it could have taken lead over many Blue-Chip companies such as HDFC Bank, Wipro, TCS and Sun Pharma to a name a few in next five years. When Amazon had entered Indian e-Commerce sphere in the year 2013, Flipkart was the only competitor which was fierce in its marketing strategy. Flipkart used to come out with a long list of discounts and offers in the festive seasons giving tough fight to the world’s biggest e-Commerce company. To match the marketing strategies of Flipkart, Amazon had to infuse a fresh sum of $2 billion to match its counterpart. Flipkart and Amazon are poles apart if we take into consideration their Capital sizes. Amazon is an MNC having experience of more than two decades. Flipkart is operating in India only with an experience of not more than a decade. Still Amazon had to consider Flipkart as the biggest competitor. The interesting part of the acquisition is that Amazon was fighting tooth and nail to win the bid over Walmart. Bansal duos would have certainly made Amazon repent its decision of not able to use their hidden potential when both were working for Amazon. But a motivating journey which became an inspiration for many young entrepreneurs seems to have drifted away from its pathbreaking success. To some people, the acquisition of the company by a mammoth retail company Walmart may sound a deal to take pride in. After all, the acquisition was done at a whopping sum of $16 billion. But the point worth contemplating is the scurry its founders have shown while making this deal.
Had Flipkart identified its Achilles heel which could have harmed it in long term? Many leading observers of emerging startup companies have pointed out the lacunae in depth of leadership that Flipkart has. There are hardly more than four or five visionary leaders in Flipkart including Binny duos. It lacks the talent having a deep understanding of the levers in the retail business. If we exclude group fashion portal Myntra’s CEO Ananth Narayanan and PhonePe’s CEO Sameer Nigam, there is almost nobody who has a rounded business perspective of things and time-tested potential to build a business that is sustainable. If we compare Flipkart with its biggest rival Amazon, Flipkart simply lacks management depth. Moreover, Flipkart claims that it has 70% share of the online market for mobile, fashion and electronics. In next five years, Groceries and Consumables are going to be the next big thing in e-Commerce. Amazon India’s sources have revealed that groceries and consumables would account for half of its business in next five years. This is where Flipkart trails behind by its biggest rival which became the strongest reason to announce its acquisition.
The success story of Flipkart is an inspiration for budding entrepreneurs. Let’s see what’s next in the sprouted grey cells of Binny duos.