Flipkart crosses $1 billion in sales, a year ahead of schedule

Last week, Flipkart announced that it had crossed the $1 billion milestone in terms of annual Gross Merchandise Value (GMV). Interestingly, it has achieved this target a full year ahead of schedule.

“We are really proud and excited to announce that we have hit a run rate of $1 billion GMV (gross merchandise value) one year before our target. In March 2011, we announced that by 2015 we wanted to hit $1bn in GMV. At that point in time our run rate was $10 million”, said co-founders Sachin and Binny Bansal.

In order to reach this milestone, the company has raised $550 million in venture capital from a group of investors such as as Tiger Global, Accel Partners, Dragoneer Investment Group, Morgan Stanley Investment Management and Naspers Group.

Flipkart started modestly by selling books online but has now evolved into something of a behemoth when it comes to the Indian eCommerce sector. Since its inception, it has diversified and gotten into many other important product categories, fashion being the latest and one of the most prominent.

Its pivot from a pure inventory model to a hybrid marketplace has given many online sellers a chance to sell their products to its growing customer base. Currently, it has around 1000 merchants signed up, which is a small number when compared to other marketplaces such as eBay India, Snapdeal, Shopclues etc. However, in the long run, Flipkart plans to target more sellers aggressively by giving them more attractive offers in terms of transaction charges, delivery and warehousing.

Tough competition from Amazon India and the planned entry of Walmart will affect the rate of growth of Flipkart in the coming months. However, their entry into the country in a full-fledged manner still depends on the relaxation of the stringent FDI rules that Indian regulators have in place.

Opportunity for seller

Though it is a milestone achieved by Flipkart, it is also a sign for the entire Indian retailer and seller community that online selling has finally arrived in India. The online selling market in India is predicted to grow to $22 billion in the next five years. Competition amongst the marketplaces will increase to outdo one another in order to attract maximum sellers. Hence it is the right time for a new seller to make an entry or an existing seller to widen the customer reach through multi-channel selling.