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If you want to place your finger on the pulse of India’s consumption story, you can do a lot worse than to lounge on a sofa in the lobby of Flipkart’s corporate office in Bangalore. On a large multi-panel screen, the real-time transactions happening on the mammoth shopping website bubble up, next to a map of India with location pins pointing to the far-flung wellsprings of consumer demand.
A push-up bra in Kottayam, a Xiaomi Redmi 3 phone in Patancheru, a pair of slim-fit jeans in Siliguri, a premium hookah in Udupi, a cordless beard trimmer in Dewas, a sweatshirt in Jorhat and a nightsuit in Alwar, a pair of JBL headphones in Fatehabad, and in Gandhidham, a DVD of Transformers: The Age of Extinction.
Michael Bay’s awful and popular visual effects orgy reaches the Gujarat town named after Mahatma Gandhi via Flipkart.
The transactions are unrelenting, bubbling up at the rate of what seems like hundreds every minute. These come from towns and villages you don’t hear from or about very much—Rayagada, Baleshwar, Jetpur Navagadh, Berhampur, Devangare, and so forth. It’s like the company has tapped into a deep well of insatiable demand, and is furiously pumping up cash.
“In the West, e-commerce is trying to grab a share of organised retail, which is 85% of all retail. In India, the organised retail is being built online. Right now, e-commerce accounts for just 2.5–3% of total retail in India. In the next five to seven years, this can become 25% to 30%. That’s what we are building for,” says Binny Bansal, the 33-year-old co-founder of India’s most successful internet startup, who was named its CEO in January this year.
We are meeting in a cafeteria on the 11th floor of the Flipkart office. The venue was dictated by Bansal’s schedule. Why lose time in Bangalore traffic when you can just ride an elevator?
The glass exterior offers views of massive construction equipment tending to high-rises coming up on both sides. The company itself operates out of more than eight different office buildings in the city. Hyper growth is a daunting thing to manage. Sometime next year, Flipkart will move into an integrated campus.
Today, more than 50% of the smartphones sold in the ₹8000–12,000 category are sold online. We created that category. Binny Bansal
We have both ordered plain dosas, served with a spicy coconut chutney and sambar. A large flask of coffee from Hatti Kaapi, the excellent Bangalore filter coffee chain that operates an outlet in the Flipkart premises, is at hand.
Flipkart is the bellwether Indian internet startup—when it does well, the entire ecosystem gets a boost. If it loses out against global giant Amazon eventually, many fear, some of the sheen of India’s action-packed startup scene will wear off.
It’s also a great polariser—no other company divides opinion quite as sharply as Flipkart. Its devoted fans and professional baiters are the startup scene’s counterparts of Modi admirers and Aam Aadmi Party followers—rooting hard and perpetually at war.
All of this is because Flipkart is currently the leading thoroughbred in a staggeringly high-stakes race. India’s retail industry is pegged to become a $1 trillion sector by 2020. Currently, it’s an estimated $600 billion industry. Of this, about 10% is the share of organised retail, which includes 2.5–3% cornered by online shopping. Companies like Flipkart, Amazon and China’s e-commerce giant Alibaba, which has invested in multiple shopping websites in India, are betting that much of India will buy online before they ever check out of a modern brick-and-mortar supermarket.