Founded in October 2007 by Sachin and Binny Bansal, Flipkart is now one of the very well-known and successful names in the list of online retail apps.
These two Flipkart founders were former employees at Amazon, who started Flipkart as an online book store, which then converted into the biggest online Indian platform and changed the shopping experience of millions of Indians.
The Flipkart business model provides people with an accessible, affordable, and convenient option to buy goods while sitting at an office, at home, or anywhere in the country.
You don’t even have to physically go to the market and ask at various shops or stores about the product; just a few clicks, and it will be delivered at your location.
From electronics to apparel, kitchen essentials to footwear, jewelry to washing machines, one can buy everything from Flipkart.
Soon this customer-centric approach and availability of various products made Flipkart India’s best and leading online app for shopping.
Flipkart reached new heights in 2018 when Walmart invested and became a major shareholder in the company to make new expansions and reach out to more customers with Flipkart CEO Kalyan Krishnamurthy.
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Everything About Flipkart Business Model
In this blog, we will read about the Flipkart business model, its journey to success, strategies that keep it ahead of competitors like Amazon, and other details.
We will also know how Flipkart’s customer-oriented approach and initiatives to start a business with small and medium-sized companies helped it gain more market from all over the country.
What is Flipkart?
Flipkart is India’s leading e-commerce application to shop online. Flipkart founders Sachin Bansal and Binny Bansal started Flipkart to provide people with a platform to buy books online.
But with a successful business model and investments, Flipkart soon added fashion, electronics, accessories, kitchen products, essentials, and almost everything on the list.
The aim was to bring people to one platform with the help of Flipkart subsidiaries like Myntra and Phone, where people can buy things from retailers, wholesalers, and manufacturers worldwide.
Also, the competition in reaching out to customers helped Flipkart to connect with many big manufacturers and wholesalers.
At the same time, its initiative “Flipkart Samarth” also helped small artisans and other small companies to reach large people.
Flipkart also keeps changing its features with the technology change and provides huge discounts, offers, and variety for people to enhance their shopping experience.
This way, Flipkart has proved its commitment towards the environment and people’s welfare, making the platform a convenient, affordable, and reliable online platform for shopping.
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The Idea Behind Flipkart Business Model
Flipkart was started as an online bookshop platform to reach people in any corner of the country with a few clicks. But with time, Flipkart expanded in other lines, where people can now buy almost everything from clothes to accessories, electronics to essential items.
The Flipkart business model was to connect the seller from all over the country to customers living in any part of the country. Besides, with great discounts and offers, quick delivery options, returns, and exchanges, Flipkart is ruling and has become the biggest name in the world of e-commerce.
Who are Flipkart’s Customers?
1. Urban Youth
This section of Flipkart users consists of people who have a busy lifestyle, trust online shopping, or want to order something without going out in the market. Today’s generation first needs to explore many options and then buy them. Therefore, it makes Flipkart the best option regarding accessibility and reliability.
2. Tech-Savvy Customers
People who know how to use the phone have online payment options and trust online shopping. These customers are mostly youth and middle-aged people. Flipkart affiliate program also enables users to earn money through banners, with a 12% commission on every click.
3. Middle-Class And Rural People
Many users of Flipkart are middle class, and some rural people want to explore the product and their prices and then buy them.
As Flipkart offers continued discounts and offers to its users, people see it as a good platform to buy essential electronics and other items while saving some money on it.
It’s a good platform for rural-class people to buy things not easily available in the area. The most famous “Flipkart’s Big Billion Days Sale” is the most demanded sale in the country.
4. Fashion-Conscious People
Flipkart is home to many different sellers from all over the country. Therefore, Flipkart attracts many fashion-conscious people looking for the latest trends, styles, and discounts on apparel, footwear, bags, and accessories.
Flipkart’s Value Proposition
1. Variety of Products
Flipkart has a wide range of apparel, footwear, electronics, gadgets, appliances, essentials, and kitchen supplies. Because of this, the customer gets everything in one place at discounted rates.
2. Seamless Delivery and User-Friendly Application
Everyone can use the Flipkart application, as people only have to select the product, add to the cart, and order it. The platform provides quick delivery in almost every part of the country. Also, Flipkart allows you to track your order, thus making the complete process hassle-free.
3. Authentic Seller
Flipkart is only connected with authentic manufacturers and retailers called Flipkart sellers, as most people are concerned about the product’s authenticity and quality in buying gadgets and electronics. Therefore, it builds customer trust by providing warranties and exchanges in case of damage.
4. Affordable Products and Competitive Pricing
Flipkart provides many discounts and offers, making the price less than what is sold. This way, it attracts budget-conscious and middle-class people to buy from Flipkart.
5. Secure and Multiple Payment Options
Flipkart has its own payment gateway secured with multiple blocks, which makes it hard for hackers to crack. It also provides multiple payment options like COD, UPI, debit/credit card, net banking, etc.
6. Unique and Innovative Features
To continue the engagement of customers with the application, Flipkart provides options like buying on EMI, using now pay later, Flipkart assured, etc.
7. Easy Exchange and Return Of The Product
Flipkart provides exchange and return options on apparel and fashion products, and warranties on electronics products, to build trust with its users.
8. Customer Reviews and Support
Flipkart posts genuine reviews of the customers who have bought the product, helping others make informed decisions. It also provides quick customer support service in case of any product-related queries or exchanges/returns.
Read Also: Meesho Business Model | How Does Meesho Make Money?
How Does Flipkart Operate?
Flipkart has a customer-friendly interface, and it’s easy to order from Flipkart. First, the customer must register on the platform and make a Flipkart ID. The already existing sellers have listed all their products with images and pricing.
All the customer has to do is browse through different catalogues or search for the product. They want to purchase and add it to the cart.
They can easily reach customer care service or read about the product on the page for more information about the product.
After checking customers’ reviews and being sure about the product, proceed to the checkout option and look for the desired payment option in the list.
Once the user adds the shipping details and pays through a secured channel, the order gets confirmed from the Flipkart side.
The team then reached out to the Flipkart seller and confirmed the order. The seller packs your product and ships it via delivery channels.
The Flipkart management team tracks the order till it reaches the customer. All these things are done with the help of Flipkart subsidiaries at different levels.
If customers like the product, they can give a rating or review; if there is any query related to return, exchange or refund, they can easily reach customer support service.
On each order, Flipkart takes some commission from the seller depending on the product and price and pays people related to the Flipkart affiliate program.
It’s this easy to order from Flipkart, which makes Flipkart a preferred choice all over India.
Flipkart Market Valuation and Funding
Flipkart is an online shopping platform started by two people. The current Flipkart CEO is Kalyan Krishnamurthy, and the app is continuously expanding through unique features and competitive pricing.
It has more than 100 million registered users with a market valuation of more than $40 billion, as per 2022 data. Here’s a closer look at Flipkart’s revenue and funding:
1. Funding Rounds
Flipkart has secured substantial financial support from 27 investment rounds to date. Their latest funding round was done on July 31, 2023, where the lead investor was Walmart. The cumulative funds raised by Flipkart in all its investment rounds is $14.3 billion.
2. Investors
Flipkart’s latest investors are Walmart, Tencent, Softbank Vision Fund, GIC, Canada Pension Plan Investment Board, etc.; it also has three exits: Myntra, Aditya Birla Fashion and Retail, and Flipkart itself.
3. Valuation
As of 2022, the estimated valuation of Flipkart is more than $40 billion, naming it India’s most valuable startup. The platform is planning a big success in 2023 through a public listing in the United States Of America.
4. Revenue Model
Flipkart’s main revenue is generated through commissions charged by sellers for each order. It means Flipkart takes a percentage from the seller for every order depending on the product and the price. Additionally, Flipkart earns revenue through advertising, video ads, sponsorships, subscription to Flipkart Plus, transaction fees, etc.,
5. Growth Potential
Flipkart has a huge growth potential as people are inclined towards online shopping. Not only this, but Flipkart will soon get private and homegrown label brands on the platform, making it a more reliable and accessible way of online shopping.
Flipkart Business Revenue Model
1. Commission On Order
Flipkart earns commission from sellers on the order of each product. The commission is based on product, price, and categories. For example, electronics items give more commissions while clothing has less commission. Sellers also pay listing fees to Flipkart to promote their products.
2. Revenue From Advertisements
Flipkart takes fees for advertisements and promotions of different brands on the platform. Sellers also pay more to Flipkart to list their products at the top in the same category than competitors.
3. Logistic Fees And Services
Flipkart provides logistic services like packaging, warehousing, and delivery to sellers, which help the product reach the customers quickly and safely. For this, Flipkart charges fees, increasing its revenue and service.
Conclusion
In conclusion, Flipkart has changed the concept of traditional shopping into an online shopping experience where you have more variety, more discounts, and a more reliable experience.
Flipkart has reached this level of success and customer trust because of its user-friendly approach, multiple payment options, and authentic products, which have helped customers to shop for their desired products in a few clicks.
Besides, Flipkart provides everything in one place at a fair price, which is sometimes less than the market price.
So, if you want better insights related to your business or need to know the difficulties and challenges faced in such an online business, contact Rahul Malodia.
He is a professional and experienced business coach who can look into the business and evaluate each factor contributing to its success and hurdles that can come the way.
Frequently Asked Questions
CA Rahul Malodia is the founder and CEO of Malodia Business Coaching Pvt. Ltd. He is a Business Coach, Mentor & Investor. He has trained over 25,000+ Businessmen across India.
