Flipkart beats the clock to $1 bn run rate

Increasing Internet penetration and youngsters shopping online has helped homegrown e-commerce major Flipkart hit an annualised sales run rate of $1 billion (over Rs 6,100 crore) — a year ahead of its target. The company was aiming to reach the billion dollar-mark (for gross merchandize value or GMV) by 2015.

"In March 2011, we announced that by 2015, we wanted to hit $1 billion in GMV. At that point in time, our run rate was $10 million. Today, we are really proud and excited to announce that we have hit a run rate of $1 billion GMV one year before our target," Flipkart co-founders Sachin Bansal and Binny Bansal in a statement.

The figures reinforce Flipkart's leadership position in the Indian e-retail market.
The Bansals, former Amazon.com employees and university friends, said that Flipkart’s strong growth figures show that the Bangalore-based e-commerce company has grown a 100 times in the last three years. “It reinforces our position as the leader in the Indian e-commerce industry,” the statement said.

Founded in 2007 by the two ex-Amazon.com employees and university friends, Flipkart.com has become India's biggest shopping portal hit and has drawn backers such as New-York based venture capitalists Tiger Global Management LLC.

The founders, now both 32, said they were "happy and proud" at the progress of Flipkart in which they invested an initial $10,000. Since its inception, the Bangalore-based firm has raised $540 million from investors including Naspers, Tiger Global, Accel Partners, Dragoneer, Morgan Stanley, Sofina and Vulcan Capital. It raised $200 million in July last year, and saw further fund infusion of $160 million in October, largely from new investors, the same year.

The Bansals are seen as typical of the new risk-ready breed of entrepreneurs that has emerged in India amid years of fast economic growth, relying not on inherited wealth but their own-start up talents to launch businesses.

Flipkart had started as an online bookstore and now sells products across categories like fashion and electronics. It is also beginning to enter areas like white goods and furniture. However, the company closed its online music business last year owing to poor sales.

While there were already Indian online sellers, Flipkart helped sales take off by allowing customers to pay cash-on-delivery. Research firm Forrester estimates India's e-commerce market to touch $8.8 billion in 2016. This will be driven by increasing Internet userbase and more people shopping online.

"E-merchandise retailing sales stood at $1.6 billion in 2013. By 2018, we think they will be $14 billion and in 2023 they will reach $60 billion," Saloni Nangia, president of leading consultancy Technopak Advisors, said.Estimates suggest that India has over 200 million Internet users, of which some 20 million transact online.