Karnataka is where all the action is and everyone’s watching very closely.
9th May 2018: Walmart signed an agreement to acquire a 77% stake in Flipkart with an investment of approximately $16 Billion. According to Business Standard, this is the largest transaction in history of online retail space globally. Google’s parent company might also buy a 10% stake in Flipkart.
It’s been quite a journey for Flipkart. The Bansal’s have been poster boys for Indian Entrepreneurship story.
Not only that, it was Flipkart that changed the deeply entrenched habit of Indian Consumers. 10 years ago, most of us were so skeptical about ordering online. We were scared to even order potatoes online and now we buy gadgets without fear of them getting damaged and other warranty issues. Buying clothes without trying was like asking for too much and last but not the least, paying for anything before you get it was considered insane.
FlipKart changed all of that with relentless innovation and untiring effort. Cash on delivery was indeed a game changer.
Many of Flipkart’s investors and employees have made a windfall. Customers in India can now expect some real royal treatment. It is also being anticipated that Walmart’s entry will work wonders for Indian Farmers and many small grocery outlets in the country will also benefit from the some fantastic supply chain management and fantastic logistics.
We will be covering more on this story later but for now three questions come to my mind?
i) Why did Flipkart have to sell off?
ii) How must Sachin Bansal be feeling?
iii) What’s the secret behind Alibaba’s success?
Maybe Flipkart could not sustain the deep discounting business model. Flipkart posted a loss of $1.3 billion on revenues of $2.9 billion in the year ended March 31, 2017.
Sachin Bansal in a good bye message said that he would be looking at gaming and will spend some time improving his coding skills. That’s the thing with learners for life I guess, they have this ability to turn any outcome into an opportunity. He’ll build another start up, I guess. What spirit!!!!!
As far as Alibaba is concerned , it’s after all Chinese and China is mysterious, complex , enigmatic , bold , protective , Nationalistic and aggressive. These traits could be a part of Alibaba’s DNA as well. An online article on Alibaba mentions that “we are very different from the Amazon model, we don’t buy products from brands, and we don’t buy and sell and take a margin, as a channel. We service as a marketplace, a bridge between the seller and the buyer, through data. A lot of transactions happen on our platform–$550 billion US worth of gross merchandise value a year. The largest commerce platform on Earth. It’s bigger than Walmart. Much bigger than Amazon.”
There’s so much difference in the Chinese and the Indian way of doing business.
We talk so much of Indian Pride, Patriotism and “Make in India” but it’s even difficult to Sell in India by an Indian Company. The Nationalist in me is asking- why could Flipkart not expand like Alibaba has?
The evening this spectacular deal was being finalized, most television news channels were talking about another battle, the electoral fight between two Indian political behemoths which is any ways a lost one. The same 18th century issues of caste, north south divide and the never changing chants of corruptions on both sides.