Flipkart has made online shopping a trend in almost every household across the world. People are going digital with their preferences and choices, which in turn is helping the e-commerce industry to set its footing strongly. Flipkart Business Model revolves around an e-commerce website operating on a B2C (Business-to-Consumer) business model. Initially started as an online book store website, Flipkart has managed to expand its services to other categories as well.
As of now, it sells over 150 million products dealing in over 80+ categories with a user base of around 180 million. It has become the second-largest e-commerce website and is acquired by Walmart for a total of $16 billion. How impressive is that!
Here is the Flipkart Business Model:
FLIPKART BUSINESS MODEL
Flipkart is currently the second-largest e-commerce company in India after Amazon.
It works on a B2C business model. Earlier it operated on a direct-to-consumer business model, providing services related to the online book store and some other products.
After its expansion in other sectors and becoming an e-commerce company, Flipkart shifted to a business-to-consumer model.
Flipkart business model connects sellers and buyers on its platform. Presently, it sells almost everything from electronics to furniture to groceries to books and much more.
Flipkart was founded by two brothers named Sachin Bansal and Binny Bansal. They both were previously working for Amazon and decided to start their own online business.
Thanks to their previous experience and their knowledge, they launched the website as an online book store in 2007.
In the initial years of Flipkart, Sachin and Binny Bansal invested in a total of $5,600 for their website’s growth.
In 2009, Flipkart managed to raise a total of $1 million from Acel India and in 2010 and 2011, Flipkart formed alliances with Tiger Global raising a total of $10 million and $20 million respectively.
It is also receiving funding from Naspers Group and ICONIQ Capital. In 2019, the company was valued at $22 billion.
REVENUE GENERATION: Flipkart Business Model
Flipkart has become a brand in itself in India that was able to attract some big companies like Walmart to its doorstep. Flipkart has an annual revenue of $3.8 billion as of 2018.
The main source of their revenue is the seller commission. Flipkart charges a commission from all its sellers who are listed on the website. The commission charged varies from seller to seller.
It also provides advertisement services for other companies on its website. In exchange for this service, it collects a certain amount of money from them.
Other than this, Flipkart has launched its own logistics company called E-Kart. It facilitates in delivering the orders smoothly from sellers and buyers. For this, it charges a fee from the sellers.
In addition to this, Flipkart has a UPI based payments application called PhonePe that assists the company in earning additional revenue.
FLIPKART’S EXPANSION: From E-commerce to Other Sectors
Flipkart has moved and expanded its reach from e-commerce to others sectors as well. In 2016, Flipkart took over FxMart which was a fin-tech company.
Through this, they launched a UPI-based application called PhonePe that provides services in the area of billing and payments. As of 2019, PhonePe was at the top for UPI payments in India.
Other than this, it also has a service called FurniSure, a store through which customers can experience the quality of their products before buying them.
CONCLUSION: The Final Word
Flipkart has managed to rise to the top spots in the e-commerce industry in India despite being in a cut-throat competition with similar established companies such as Amazon.
Flipkart Business Model helped the company in its expansion and growth. Unlike Amazon, Flipkart adopted the strategy of making available similar products at a cheaper rate with good quality which led to the success of Flipkart in India.