JOIN USFlipkart targets $8-billion GMV by year-end
Lauding the government’s policy initiatives in its disruptive business model, eCommerce major Flipkart CEO Sachin Bansal said the company will double the gross merchandise volume (GMV) of products sold on its platform to $8 billion (about Rs 50,000 crore) by the end of 2015.
In an interaction with Deccan Herald, Bansal said the company has already achieved $5 billion. “We are witnessing an overwhelming response from the market and the target was decided at a recent board meeting held in Singapore,” he said. Since eCommerce companies do not reveal their revenues, GMV or the dollar value of merchandise sold on its marketplace, is considered an important metric.
Commenting on the app-based business model, he said the multi-channel business model will shrink as mobile penetration increases in the country. “We have already celebrated the first year of our mobile app-based business. Here the adoption rate is overwhelming. We are expecting a tsunami of change in the Indian eCommerce market place with the growing penetration of smartphones,” he said.
He said the country will shift from mobile-first to mobile-only. “India’s internet spend via mobile is 10 per cent and it is growing exponentially as smartphone usage grows. We have been witnessing a slide in desktop usage. Here the problem is that broadband infrastructure is not picking pace with demand,” he said.
Bansal said Flipkart has set an ambitious target of shipping a billion units a month and serving 100 million customers by 2018. “We have been shipping about 10 million units a month. We are using existing logistics partners and are ready to tie up with others like India Post,” he said.
When asked about the company’s fortunes, the CEO said it will turn profitable soon. “We will become a profitable company within a couple of years,” he said. On the policy framework on eCommerce, he said the company is complying with all regulatory norms. “Flipkart is not finding any regulatory hurdles in its journey. Here we are finding support from the government,” he said.
Flipkart, founded in 2007 by Sachin Bansal and Binny Bansal, is now valued at about $12.5 billion and competing with peers like Snapdeal, eBay India, Amazon, Jabong, Homeshop 18, etc. The Indian e-tailing market will be worth $32 billion by 2020, more than 10 times its value of $2.3 billion in October last year, states a recent study.