Everyone has heard about the legendary company which was basically one of the frontrunners of online shopping platforms when it wasn’t the common practice at all. Flipkart, the multinational E-commerce company  was the brainchild of Sachin and Binny Bansal. It started out with the sole purpose of being and online bookstore. While the company itself has grown far beyond the bounds of being called a startup, the foundation still remains the same.

The Startup Duration

Sachin and Binny , both were employees of Amazon. The company, Flipkart itself was founded in October 2007 in Bengaluru. The Company’s first office was a two bedroom apartment in Kormangala, Bengaluru. In the initial phase, the website was dedicated only to selling books.
The Bansals started their company with an initial investment of 4 lakh each which they got from their families. They launched the website in October 2007 and received 100 orders per day by 2008. They focused on providing a hassle free online shopping experience, with features such as cash on delivery, 30 day replacement, and free shipping.

The business Model

Flipkart operates as an online marketplace that connects sellers and buyers across various categories of products, such as books, electronics, fashion, home appliances.

Flipkart operates as an online marketplace that connects sellers and buyers across various categories such as books, electronics, fashion, home appliances, groceries, and more. Flipkart generates revenue from multiple sources, such as:

  • Commission fees: Flipkart charges a percentage of the sale price from the sellers who use its platform to sell their products. The commission rate varies depending on the product category, price, and seller rating.
  • Shipping fees: Flipkart also charges a shipping fee from the sellers for delivering their products to the customers. The shipping fee depends on the product weight, size, and distance.
  • Advertising fees: Flipkart offers paid advertising services to the sellers who want to promote their products on its website and app. The advertisers pay Flipkart based on the number of clicks or impressions their ads receive.
  • Subscription fees: Flipkart has a loyalty program called Flipkart Plus, which offers benefits such as free and fast delivery, early access to sales, and rewards points to the customers who pay an annual fee of Rs. 500.
  • Private labels: Flipkart has launched its own brands of products under different names, such as Flipkart SmartBuy, MarQ, Billion, and Supermart. These products are sourced from third-party manufacturers and sold exclusively on Flipkart at competitive prices.
  • Flipkart’s business model is based on providing convenience, variety, affordability, and trust to its customers, while also enabling the sellers to reach a large and diverse market. Flipkart faces competition from other e-commerce players in India, such as Amazon, Snapdeal, Paytm, and Shopclues. Flipkart has also acquired several companies to expand its portfolio and market share, such as Myntra, Jabong, PhonePe, eBay.in, and Ekart. Flipkart is currently owned by Walmart, which acquired a 81.3% stake in the company in 2018 for $16 billion.

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