Chapter – 3

Company Profile [Flipkart]

INTRODUTION

Flipkart Private Limited is an Indian e-commerce company,

headquartered in Bengaluru, and incorporated in Singapore as a
private limited company. The company initially focused on online
book sales before expanding into other product categories such
as consumer electronics, fashion, home essentials, groceries,
and lifestyle products.

The service competes primarily with Amazon's Indian subsidiary and

domestic rival Snapdeal As of March 2017, Flipkart held a 39.5%
market share of India's e-commerce industry. Flipkart has a dominant
position in the apparel segment, bolstered by its acquisition of Myntra,
and was described as being "neck and neck" with Amazon in the sale
of electronics and mobile phones

In August 2018, American retail chain Walmart acquired a 77%

controlling stake in Flipkart for US$16 billion, valuing Flipkart at
around US$20 billion Flipkart is valued at $37.6 billion as of 2022 It is
planning to go public through a listing in the United States of America
in 2023.
HISTORY

 Flipkart was founded in October 2007 by Sachin Bansal and Binny

Bansal, alumni of the IIT, Delhi and former Amazon employees.
The company initially focused on online book sales with country-
wide shipping. Flipkart slowly grew in prominence and was
receiving 100 orders per day by 2008.

 Growth, Mergers and Acquisitions

 In 2010, Flipkart acquired the Bangalore-based social book

discovery service WeRead from Lulu.com.
 In 2011, Flipkart acquired the digital distribution business
Mime360.com and the digital content library of the Bollywood
portal Chakpak. Following the acquisition, Flipkart launched their
DRM-free online music store Flyte in 2012. Due to competition
from free streaming sites, Flyte was unsuccessful and shut down
in June 2013.
 With its eyes on India's retail market, Flipkart acquired Letsbuy,
an online electronics retailer, in 2012, and Myntra, an online
fashion retailer, for US$280 million in May 2014. Myntra
continues to operate alongside Flipkart as a standalone
subsidiary focusing on separate market segments.
 In April 2015, Flipkart acquired Appiterate, a Delhi-based mobile
marketing automation firm. Flipkart stated that it would use
Appiterate's technology to enhance its mobile services. In
December 2015, Flipkart purchased a minority stake in the digital
mapping provider MapmyIndia.
 the UPI mobile payments startup PhonePe. In 2022, when
PhonePe moved its entire base to India, Flipkart separated the
ownership of PhonePe and shareholders in India and Singapore
and the respective shareholders purchased shares of PhonePe's
India entity directly. It was announced that a cash payout of
approximately $700 Mn was to the former and current employees
who were holding PhonePe's shares.
 In 2016, Flipkart acquired the online fashion retailer Jabong.com
from Rocket Internet for US$70 million and
 In January 2017, Flipkart made a US$2 million investment in
TinyStep, a parenting information startup.
 In April 2017, eBay announced that it would sell its Indian
subsidiary, eBay.in, to Flipkart and invest US$500 million in the
company. While eBay suggested that the partnership would allow
Flipkart to access eBay's network of international vendors, these
plans never came to fruition. In July 2017, Flipkart made an offer
to acquire its main domestic competitor, Snapdeal, for US$700 to
800 million. It was rejected by Snapdeal, which was seeking at
least US$1 billion.
 Flipkart invested US$4 million in the customer engagement and
rewards platform EasyRewardz on 19 November 2019.
 In 2020, Flipkart Wholesale launched a digital platform for
kiranas and MSMEs. In July 2020, Flipkart acquired a 27% stake
in Arvind Fashions Limited's newly formed subsidiary Arvind
Youth Brands for US$35 million. Arvind Youth Brands owns the
Flying Machine brand. Flipkart also announced it will roll out
Flipkart Quick, a hyperlocal 90-minute delivery service for
product categories such as groceries, home accessories, mobile
phones, stationery, and more.
 In October 2020, Flipkart acquired a 7.8% stake in Aditya Birla
Fashion and Retail for US$204 million. The following month,
Flipkart acquired the intellectual property of gaming startup
Mech Mocha for an undisclosed amount. The acquisition formed
part of Flipkart's plans to gain and retain users by offering casual
games. In November 2020, Flipkart acquired augmented reality
company Scapic, which provides a suite of tools to create and
publish augmented reality, virtual reality, and 3D content quickly
and without coding.
 In April 2021, Flipkart announced the acquisition of travel
booking portal Cleartrip.
PARTNERSHIP

 In February 2014, Flipkart partnered with Motorola Mobility to be

the exclusive Indian retailer of its Moto G smartphone. Motorola
also partnered with Flipkart on the Moto E, a phone targeted
primarily towards emerging markets such as India. High demand
for the phone following its midnight launch on 14 May caused the
Flipkart website to crash. Flipkart subsequently held exclusive
Indian launches for other smartphones, including the Xiaomi Mi 3
in July 2014 (whose initial release of 10,000 devices sold out in
around 5 seconds), and the Redmi 1S and Redmi Note in late
2014.
 On 6 October 2014, coinciding with the company's anniversary
and the Diwali season, Flipkart held a major sale that it promoted
as "Big Billion Day". The event generated a surge of traffic,
selling US$100 million worth of goods in 10 hours. The event
received criticism via social media over technical issues
experienced during the event and stock shortages.
 In October 2015, Flipkart reprised the Big Billion Days event as a
multi-day event exclusive to the Flipkart app. Flipkart bolstered
its supply chain and introduced more fulfillment centers to meet
customer demand. Flipkart achieved a gross merchandise volume
of US$300 million during the event, with the largest volumes
coming from fashion sales and the largest value coming from
mobiles.
 In 2017, Flipkart sold 1.3 million phones in 20 hours on 21
September during its Big Billion Days promotion, doubling the
number sold on the first day of the same event in 2016. Flipkart
held a 51% share of all Indian smartphone shipments in 2017,
overtaking Amazon India (33%).
 In August 2019, Flipkart partnered with Authentic Brands to
license and distribute Nautica in India. It was reported the same
month that Flipkart entered talks to invest around US$40 million
in last-mile delivery startup Shadowfax, which would be the
company's third investment in the logistics sector after backing
BlackBuck and QikPod. The deal was completed four months
later as a US$60 million financing round. It also launched a
reward system called Super coins which allowed customers to
earn points on various Flipkart brands like Myntra, Cleartrip and
Phonepe.

WALMART INVESTMENT

 On 4 May 2018, it was reported that Walmart had won a bidding

war with Amazon to acquire a majority stake in Flipkart for
US$15 billion. On 9 May 2018, Walmart officially announced its
intent to acquire a 77% controlling stake in Flipkart for US$16
billion. Following the purchase, Flipkart co-founder Sachin Bansal
left the company. The remaining management team reported to
Marc Lore, CEO of Walmart eCommerce US. Walmart president
Doug McMillon cited plans to help Flipkart with its sourcing and
supply chain, while tapping on its expertise to expand Walmart
globally. Indian traders protested against the deal, considering it
a threat to domestic business.
 In a filing with the U. S. Securities and Exchange Commission on
11 May 2018, Walmart stated that a condition of the deal
prescribed the possibility that Flipkart's current minority
shareholders "may require Flipkart to effect an initial public
offering following the fourth anniversary of the closing of the
transactions at a valuation no less than that paid by Walmart".
 Following the announcement of Walmart's deal, eBay announced
that it would sell its stake in Flipkart back to the company for
approximately US$1.1 billion and relaunch its own Indian
operations. The company stated that "there is the huge growth
potential for e-commerce in India and significant opportunity for
multiple players to succeed in India's diverse, domestic market.
 Softbank Group also sold its entire 20% stake to Walmart without
disclosing terms of the sale. Walmart's acquisition of 77% stake
in Flipkart was completed on 18 August 2018. Walmart also
provided US$2 billion in equity funding to the company.
 On 13 November 2018, Flipkart CEO Binny Bansal resigned after
facing an allegation of "serious personal misconduct". Walmart
stated that "while the investigation did not find evidence to
corroborate the complainant's assertions against Binny, it did
reveal other lapses in judgment, particularly a lack of
transparency, related to how Binny responded to the situation.
 In July 2021, Flipkart launched its social commerce marketplace
called Shopsy, which allowed individuals and small businesses to
direct sell and resell products to customers via social media
channels. In December 2021, Shopsy entered the grocery delivery
segment in 700 cities across India. Gujarati language was also
added to their platform in 2021 which resulted in Flipkart being
available in 8 local Indian languages that were Gujarati, Bengali,
Odia, Hindi, Telugu, Kannada, Marathi and Tamil. Shopsy passed
more than 100 million users in the month of September in 2022
with more than 60% of users coming to tier 2 and other cities.
 In April 2022, Flipkart launched its first grocery fulfilment centre
in Northeast India, based in Guwahati. The centre was reportedly
women-run to support the career progression of Flipkart's female
employees. The same month, the company established the
Flipkart Foundation to support entrepreneurship and skill
development within underserved communities in India. Flipkart
also partnered with Narayanpet District - also known by its brand
name Aarunya in Telangana that is known for handlooms and
handicrafts to build capacity of local women artisans and have
their products available for purchase online. Similarly, the
organization also partnered with Government of West Bengal's
Micro, Small and Medium Enterprises and Textiles (MSME&T)
Department to help local artisans, handcraft makers and weavers
to get training and support to sell their products on the platforms
via timebound incubation.
 The total revenue in 2022 was that of ₹43,357 crore was reported
for the past fiscal year of 2020-2021. This was 25% more than its
revenue in the fiscal year of 2020. The losses were reported to
have reduced by 23% to ₹2,445 Crore with total expenses of
₹45,801.
 In 2022, Flipkart entered the Non-Fungible Tokens (NFTs) and
Web3 segment by letting the Indian purchasers of Nothing Phone
(1) to get Nothing's NFT through the app called Nothing
Community Dots. These NFTs use Polygon blockchain to host it.
The NFT drop happened at FireDrops - which was done on
Flipkart's NFT marketplace, supported by GuardianLink. In
October 2022, Flipkart also created a shopping platform that was
metaverse-based, called Flipverse. The platform allows people to
explore products and shop in a more interactive way. The
Flipverse has been created through a partnership with a Polygon-
incubated firm called eDAO, and Flipverse hopes to provide a
similar experience to actual mall like shopping where people
would be able to create their own Avatars.
 Flipkart also entered the hotel industry for Indian and global
market. The Flipkart Hotels uses Cleartrip API. Flipkart acquired
the Cleartrip's business in middle east by signing an agreement
with Wego - an online market place for travel that operates in
middle east and North Africa. This included sale of website
Flyin.com. The ecommerce also started a virtual storefront that
is dedicated to academic needs of students named ‘Flipkart
Student’s Club’.

BUSINESS STRUCTURE

 According to a report in November 2014, Flipkart operated with a

complex business structure that included nine firms, some
registered in Singapore and some in India. In 2012, Flipkart co-
founders sold WS Retail to a consortium of investors led by
Rajeev Kuchhal. Flipkart's Indian entities are owned by Flipkart
Pvt. Ltd, which is registered in Singapore. The Singapore-
registered entity owns eight Indian companies, including Flipkart
Internet Pvt. Ltd, the company that runs the e-commerce
marketplace Flipkart.com, Flipkart India Pvt. Ltd, the wholesale
 business, and Flipkart Logistics Pvt. Ltd, which runs Ekart (the
internal logistics arm that can be used by other ecommerce
players). Flipkart also started Flipkart Health+ (through an app) in
2021 that deals into providing medicines and health services
through technology. This was started with the help of getting
majority share in Sastasundar Marketplace Limited - an existing
company that already was providing online pharmacy services.

Notable companies in which Flipkart Group owns a controlling stake

include:

Name Type Since Current stake

Myntra Fashion 2014 100%
Ekart Logistics 2015
Flipkart Wholesale B2B e-commerce 2020 100%
Cleartrip Travel booking 2021 80%
SastaSundar Healthcare 2021 75.1%

 Flipkart has made 22 acquisitions and 24 investments, spending

over US$395M for the acquisitions.] Flipkart has invested in
multiple sectors such as e-commerce, consumer electronics,
local services and more. In 2022, it also revised it's policies for
sellers in an attempt to make it more seller-friendly. This
included simplifying the rate card and reducing fee for return
costs.

FUNDING

 The initial development budget of Flipkart was 400,000

(US$5,000). It later raised funding from venture capital firms
Accel India (receiving US$1 million in funding in 2009) and Tiger
Global (US$10 million in 2010 and US$20 million in June 2011).
On 24 August 2012, Flipkart announced the completion of its 4th
round of funding, netting a total of US$150 million from MIH (part
of the Naspers Group) and ICONIQ Capital. The company
announced on 10 July 2013 that it had raised an additional
US$200 million from existing investors, including Tiger Global,
Naspers, Accel Partners and Iconiq Capital.
 Flipkart's reported sales were 40 million (US$500,000) in the
FY2008–09,200 million (US$2.5 million) in the FY2009–10 and 50
million (US$9.4 million) in the FY2010–11.
 Flipkart reported a loss of 2.81 billion (US$35 million) for the
FY2012–13. In July 2013, Flipkart raised US$160 million from
private equity investors.
 In October 2013, it was reported that Flipkart had raised an
additional US$160 million from new investors Dragoneer
Investment Group, Morgan Stanley Wealth Management, Sofina
SA, and Vulcan Inc., with a share of the funding coming from
existing investor Tiger Global.
 On 26 May 2014, Flipkart announced that it had raised US$210
million from Yuri Milner's DST Global and its existing investors
Tiger Global, Naspers, and Iconiq Capital.
 On 29 July 2014, Flipkart announced that it raised US$1 billion
from Tiger Global, Accel Partners, Morgan Stanley Investment
Management, and a new investor, Singaporean sovereign-wealth
fund GIC.
 In December 2014, after it received US$700 million from another
round of funding, Flipkart had a market cap of US$11 billion.
 On 20 December 2014, Flipkart announced its filing application
with Singapore-based company regulator ACRA to become a
public company. This announcement came after the company
received US$700 million in long-term strategic investments from
more than 50 Indian investors. The US$700 million in funding
raised by Flipkart added new investors to the company's board,
including Baillie Gifford, Greenoaks Capital, Steadview Capital, T.
Rowe Price Associates, and Qatar Investment Authority. Its
existing investors DST Global, GIC, ICONIQ Capital and Tiger
Global also participated in this financing round. As of May 2015,
Flipkart had raised US$550 million in additional funding from its
existing investors in a deal that raised its total valuation to
US$15 billion.
 By August 2015, after raising another US$700 million, Flipkart
had raised a total of US$3 billion over 12 rounds of funding from
16 major investors. In April 2017, Flipkart underwent another
round of funding, receiving US$1.4 billion in funding from
investors including eBay, Microsoft, and Tencent. On 10 August
 2017, SoftBank Vision Fund invested another US$2.5 billion in
Flipkart.
 On 19 September 2018, Flipkart Marketplace Singapore injected
3,463 crore into Flipkart Internet. The transaction was done in
two tranches, according to regulatory filings.
 In March 2021, it was reported that Flipkart was considering the
possibility of going public through a merger with a special-
purpose acquisition company (SPAC) to speed up its listing
process in the United States.
 In 2022, the organization started Flipkart Ventures and created a
venture fund of $100 Million to be invested in other 6 start-ups
selected for Flipkart Leap Ahead, an accelerator program. Each
start up will be given an equity investment of up to $500,000.
Once the first cohort of Flipkart Leap was completed, the
program was split in two distinct programs known as Flipkart
Leap Ahead (FLA) and Flipkart Leap Innovation Network (FLIN).

REGULATORY ACTION AND LAWSUITS

 In November 2012, the Indian Enforcement Directorate began

investigating Flipkart for alleged violations of the foreign direct
investment regulations of the Foreign Exchange Management Act
of 1999. On 30 November 2012, Flipkart's offices were raided by
the Enforcement Directorate. Documents and computer hard
drives were seized by the agency. In August 2014, the
Enforcement Directorate claimed that it had found Flipkart to be
in violation of the Foreign Exchange Management Act. The Delhi
High Court declared that several e-commerce firms, including
Flipkart, had violated foreign investment regulations.
 In January 2016, a public interest litigation hearing took place
over Flipkart's alleged contravention of foreign investment
norms. The court asked the Reserve Bank of India to provide the
latest circular on foreign investment policy. The same month, the
Department of Industrial Policy and Promotion (DIPP) clarified
that it did not recognise the marketplace model of online retail.
In February 2016, Health Minister J P Nadda announced that the
Maharashtra FDA had taken action against Flipkart, among
others, for selling drugs without a valid license.
CONSUMER AFFAIRS

 A group of scammers was arrested by the police in Lucknow in

2022 who used the platform to scam the customers. The scam
included replacing the online ordered Apple products with bricks
to cheat customers and company. Such scams have also been
reported in the past where soaps were delivered instead of
iphones on Flipkart and also on Amazon.

HOUSE BRANDS

 Flipkart operates several house brands, including Citron (home

appliances) and Digiflip (formerly for electronics and
accessories). In 2017, Flipkart launched additional house brands,
including Billion (smartphones), Smartbuy (electronics
accessories, effectively replacing Digiflip), and MarQ (for large
appliances, although its launch was complicated by a trademark
dispute with an existing company, Marc Enterprises).
 In 2019, Flipkart began selling Nokia-brand televisions. A 55-inch,
Android TV-based 4K Smart TV was the first product released
under that licensing agreement. A 43-inch TV was unveiled on 4
June 2020.

FLIPKART VIDEO

 Flipkart launched an in-app streaming service called Flipkart

Video in August 2019, so as to compete with industry rivals like
Amazon who were also offering premium video options. The
initial line up of content was curated from the service providers
like Viu, Voot and TVF.

FLIPKART VIDEO ORIGINALS

 To strengthen its content offering on Flipkart Video, Flipkart

forayed into original content production, known as Flipkart Video
Originals. The first show was launched on 19 October 2019.
Named Back Benchers, it was a Bollywood celebrity quiz show
hosted by Farah Khan.
CRITICISM

 On 13 September 2014, a Flipkart deliveryman allegedly molested

a housemaid in Hyderabad. The housemaid's employer sued
Flipkart for this incident, citing the need for regulations to make
offline delivery services safer.
 In 2014, competitors such as Future Group (owner of retail chain
Big Bazaar at that time) filed complaints with India's Ministry of
Commerce and Industry, alleging that Flipkart's Big Billion Days
discounts undercut prices in a manner predatory to other
retailers. The ministry stated that it would look into the
complaints.
 In April 2015, Flipkart faced criticism for being a launch partner
in the Airtel Zero program. Critics alleged that the zero-rating
scheme violated the principles of net neutrality. Flipkart later
pulled out of the project.
 In 2015, around 400 delivery executives working with eKart, the
logistics arm of Flipkart, went on strike to protest poor working
conditions. Complaints included seven-day workweeks, extended
hours, and a lack of clean toilets and medical assistance for bike
riders involved in accidents. In 2016, delivery executive
Nanjunda Swamy was murdered by a customer who did not have
enough money to pay for a product. In response, Flipkart
launched a safety initiative -'Project Nanjunda', named after the
deceased executive. This included an SOS button in the mobile
app (called the Nanjunda button) that could be used by field
executives in case of emergencies.
 Vendors on Flipkart have faced several challenges while doing
business on the company's marketplace, to the extent that some
of them have quit the portal. Some of these challenges include
Flipkart's alleged unfair policies towards sellers, the lack of a
competent logistics service, and customer returns that are a
result of consumer fraud.
AWARDS AND RECOGNITION

 Sachin Bansal was awarded Entrepreneur of the Year, 2012–13

from The Economic Times, a leading Indian economic daily
newspaper.
 In September 2015, the two founders entered Forbes India's
richest Indian by year, debuting in the 86th position with a net
worth of US$1.3 billion each.
 In April 2016, Sachin and Binny Bansal were named to Time
magazine's annual list of the 100 Most Influential People in the
World.
 Flipkart was reported to be at top in the annual Fairwork India
Ratings 2021 - which is a 10 point system that creates a score
based on fair pay, conditions, contracts, management, and
representation. A total of 11 platforms were evaluated by a
consortium of Centre for IT and Public Policy (CITAPP),
International IIIT Bangalore and global Fairwork network.
Methodology included qualitative interviews with 19-20 workers
in Delhi and Bangalore.

See also

 E-commerce in India
 Online shopping

References
 "Kalyan Krishnamurthy to be Flipkart's new CEO; Sachin Bansal to
remain group chairman". The Economic Times. 10 January 2017.
 Shrivastava, Aditi (2 November 2019). "Flipkart's FY19 revenue up
42% to Rs 43,615 crore". The Economic Times. Retrieved 2 November
2019.
 Mishra, Digbijay. "Binny Bansal sold part stake in Flipkart in July
funding round". The Economic Times. Retrieved 21 June 2022.
 "Flipkart to sack 800 more amidst gloomy biz outlook". The Hindu.
9 September 2016.
 Halzack, Sarah (9 May 2018). "Walmart Is Right on Flipkart Despite
Investor Qualms". Bloomberg. Retrieved 11 May 2018.