The most current e-commerce statistics from Statista.com state that 40% of internet users worldwide have purchased products or goods online, and that number is only expected to grow. Although it may seem like world e-commerce leader Amazon is poised to take over the rest of the market, a newbie company from India may give it a run for its money.
Sachin and Binny Bansal (who are not related) started their careers in e-commerce in 2007 as Amazon.com engineers, assisting the U.S.-based company with its expansion into India, where the two men are from. Now, the Bansals’ post-Amazon small business venture is set to oust Amazon as the top online retailer in India.
India’s young e-commerce market is currently being dominated by Flipkart, the brainchild of the two Bansals, and they recently announced that they’d raised $700 million in investments to expand the company even further. According to Forbes, that makes the internet firm worth about $11 billion USD, making the Bansals two of the wealthiest people in India.
“When we first talked to VCs (venture capitalists), we told them we had a target of $100 million over five years,” Binny Bansal told India Today in 2013. “No one, including us, knew e-commerce was going to be so big,”
Over $1 trillion of retail sales in the U.S. in 2012 were directly tied to e-commerce, but India is much newer to selling online.
Sachin Bansal said it was the company’s cash-on-delivery feature that made all the difference. “In 2010, we started cash on delivery,” he told India Today. “Before that, most of the e-commerce companies were dependent on online payments: Credit cards or Internet banking. Cash on delivery opened up a huge set of customers who did not have credit cards, or who did not know how to use those debit or credit cards, or weren’t comfortable using them.”
Over the course of the year, Flipkart accepted over $1.9 billion of outside money, raising the largest amount of venture capital of any private technology firm after Uber Technologies.
Asian competitors in the e-commerce market, like Rakuten and Alibaba, are still going strong, so Flipkart has a ways to go before it catches up. But the success of the business signifies a huge step forward for Indian e-commerce.
“It will take a few more years for us to get each and every item sold anywhere in India made available on Flipkart,” Sachin Bansal told India Today. “That is our vision for the next three years.”