Flipkart is a well known and leading e-commerce company in the world. I believe almost all of us have purchased/ ordered goods from the e-commerce giant. During the festive season, flipkart festive sales and offers have been a wait for the Indians. Big discounts, offers, cashback which everyone loves to get.
We all know the flipkart business as a E-commerce operator but do you know what are the different sources of Flipkart earning, its business model and its success from inception to one of the biggest E-commerce in the world.
This article will give you a deep understanding of the Flipcart’s Business Model
Flipkart was started in 2007 in Mumbai by Sachin Bansal and Binny Bansal. An Indian company started just 16 years back has achieved a great milestone and has acquired many prominent companies world wide. Initially when the company was founded it offered online books sales with shipping throughout India.
Later on gradually the company expanded its business into electronics, fashion, home consumer products, lifestyle products, groceries and a lot more.
The company has expanded its business worldwide gradually and is the second largest e-commerce company in India.
Flipkart’s Business Model
Flipkart is a multi series business model company. The source of the Flipkart’s earning is varied. In the multi series business model Flipkart generates revenue and operates targeting a wider audience offering different products and services.
Breakup of Flipkart’s Business Model
- Online Marketplace: This is a major revenue generating activity of Flipkart Business. The company offers millions of products of different uses, with thousands of company, brand, stores listing their product on the Flipkart site. The users have a varied choice for the product, compared with the other offering the same product, filter according to users’ need.
- Advertising Revenue: FLipkart allows brands, companies, vendors to market their product on flipkart platform. This generates a significant portion of Flipkart’s revenue. It helps the brands, company to increase the customer reach and offer their products to larger audiences.
- Subscription based Service: Flipkart business model has some subscriptions plans, like OTT platform offers subscriptions plans for their platform to enjoy the service, Flipkart has introduced Flipkart plus where customers can enjoy many offers related to their purchase. It offers discounts, free delivery, early access to sale, and a lot more exciting offers.
- Commission based revenue: Flipkart charges commission from the brands, company’s, vendors who offer their product to sell on the platform. The commission is charged on the sale price of the product being sold. It varies from product to product. This being another revenue part of Flipkart.
- Flipkart logistics and fulfilment service: Flipkart has a strong network of logistics through which it delivers goods through the country. For the delivery, shipping and storage flipkart charges a fee which accounts for another revenue portion of the company.
Flipkart has reported a revenue of Rs. 511.76 billion in 2022 against a revenue of Rs. 433.57 billion in 2021. The revenue of the company has seen a significant increase in the last two years, depicting the growth potential and strong comeback of the demand post Covid. The company has raised a total of $14.3 billion in different rounds of fundraising.
The company widened its losses in FY 22 with a loss of Rs.4362 crore from loss of Rs. 2882 crore in FY21. The increase in losses was majorly due to rise in marketing, legal and transport expenses.
As of 2022, Flipkart was valued at $37.6 billion.
The company has an monthly active users of around 200 million and the company is looking for 300 million active users per month in the next few years.
Big Billion Days
Every festive and end season of the Flipkart Big Billion Days sales make the market crazy for shopping. With huge discounts, offers, cashback, Flipkart offers great incentives and persuades the audience to buy their favourite product. Every Indian waits for the big billion day sales to order their favourite apparel, necessary goods, luxuries and other products. The concept of Big Billion Days was introduced in 2014. The company experienced a great success of the sale with around gross merchandise volume of $300 million on the event.
Flipkart majorly being an E-commerce operator function in a following way:
Listing of products on the platform: Flipkart allows the brands, companies, vendors to list their offerings on the flipkart platform to reach a larger audience and increase their sales.
Customer’s order: Once the products are listed on the platform of the company, the users or the customers can browse the millions of products available on the platform and add to the cart their favourite products. Once the customer decides the products, he can now place the order with flipkart providing necessary details of the customer.
Name, Address, Contact no, mail id, payment option, bank account details.
Delivery: Once the order is confirmed the flipkart shipping and dispatch team starts the packaging and delivery of the product. Users can track the live status of their product with the expected date of delivery.
Payment: In case the customer has selected an online payment option, customers are required to pay before the product gets confirmed. In case the customer has opted for COD (Cash on Delivery), the customer can pay at the time of delivery.
Customer Support: If a customer is not satisfied with the product, he can return, replace the product within the time limit. Customers can connect with the Support team to resolve the issue. Customer can ask for the refund and payment related with the Flipkart 24*7 customer support service.
Acquisition by Flipkart
Flipkart has acquired many prominent company, startups since its inception.
In 2014 Flipkart acquired 100% stake in the top fashion and apparel online platform Myntra for $300 millions.
In 2015, the company acquired a logistics and related service company Ekart.
In the year 2021, Flipkart acquired a stake in two companies Cleartrip (Travel booking company) and Sastasundar (Healthcare company).
Till date the company has made 35 investments with an overall investment of $420 million.
Year 2018 was a turning year for the company, Flipkart. Walmart, an American Multinational retail corporation, has won the bid to acquire a majority stake in Flipkart against Amazon’s bid. Flipkart was acquired by Walmart for $16 billion with 77% stake in the company.
Conclusion:Flipkart has brought an online shopping buzz in the Indian market. With the introduction of Big Billion Days it has captured a large volume and numbers of market online shopping share. The company has offered a great marketplace mainly for Indians to enjoy online shopping with an easy and friendly interface. Company has expanded its business model through diversified revenue sources. Company is showing positive numbers and looking to bring the best for the customers with innovation and service.