Flipkart, is often referred to as ‘the poster boy’ of e-commerce. When Flipkart is in the news, it has to be huge. This time, the online giant marketplace is in the limelight about a fresh round of funding. This time, probably next week, Flipkart will announce that it has raised over $1 billion (Rs. 6,000 crore), which is the biggest ever fund-raising by an Indian e-commerce organization.
Although the news is not confirmed yet, reports suggest that the partial amount will arrive from existing investors Tiger Global, Russian billionaire Yuri Milner’s DST and Accel Partners while the rest will be funded by a couple of new investors. The eruption of this news is all over the social media as this new development takes the total funding for Flipkart to over $1.7 billion.
Among those who are interested in in investing in India’s giant online marketplace are Singapore’s sovereign wealth fund GIC and USbased investment firm T Rowe Price. With the latest deal, Flipkart will be valued at over $5 billion. Flipkart crossed $1 billion in GMV in March and is now regularly hitting the 5 million orders a month mark. Until now, Amazon is the biggest threat for Flipkart as the former continues to pump in more money in its India operations and has expanded its product categories to over 25. A billion dollars in fresh funding is not the very first in the Indian market, but it definitely is amongst the biggest fund raises, globally in 2014. Earlier in June, this year, Silicon-Valley based Uber raised $1.2 billion at a value of around $17 billion.
Flipkart’s biggest competitor is Amazon.in and closer home, Snapdeal especially since the latter raised $133 million from eBay to gain momentum in the market. With orders crossing the 5-million-amonth mark, Flipkart will have to invest in its backend operations in such a slit-throat market. Moving on, the company still continues to discount heavily on its products, being at par with Amazon and Snapdeal.
In June last year, Amazon entered the Indian market and set the Indian e-commerce sector on fire. While eBay has been banking on Snapdeal, both Amazon and Walmart are pushing to aggressively conquer what is becoming the last frontier for them.
The Indian internet infrastructure is now improving, especially with users going mobile and almost all the online marketplaces pushing their revenue heavily via m-commerce. This helps the current base of 200 million users grow exponentially.
The biggest e-commerce market in the world is China which holds a value of over $200 billion. Being startups, Flipkart and Snapdeal are wooing new global and high profile investors with each new round of funding. Some of Flipkart’s greatest initiatives in 2014 include: Exclusive launch of Motorola phones like Moto G, Moto E and Moto X – which considerably sold over 10 lakh phones in 5 months. Flipkart’s self branded tablets, partnering with China based company, Xiaomi, Flipkart First Privilege subscription service, the acquisition of Myntra and the same day guaranteed shipping.
There is no doubt that Indian eCommerce market is growing at break-neck speed, however, the kind of fund raising Flipkart is able to raise clearly shows that they are going from strength to strength. With newer strategies and market funding breaking barriers of all kinds, the e-commerce industry is sure to witness major changes that would change the face of online marketplaces.