India’s largest online bookstore, Flipkart.com, has announced its ambitious plan to reach USD 1 billion turnover by 2015.
Flipkart started back in 2007 with a investment of $9,000. Since then, it has grown to a turnover of $5.5 million in FY 2010 and is expected to record $16.6 million for this FY. It also plans to hit a whopping $100 million by FY 2012, a six-fold jump from this year’s sales.
To achieve greater sales, Flipkart will diversify into other products such as music, mobile devices, consumer electronics and games.
“We aim to be a $1 billion company over the next 3-years. We are growing at a CAGR of 700 per cent in the last two-years and hope to maintain that. Given the growth rate, the figures are not at all ambitious but achievable. We expect revenue to grow multi-fold on the back of our major expansion plan,” said Sachin Bansal, Founder and CEO of Flipkart.
Volume and discounts are the main drivers towards Flipkart’s strong sales growth over the 3 years since its inception.Bansal said, “Flipkart offers around 15-20 per cent discount on every book and hence its revenues are mainly volume-driven. It sells 150,000 books a month and has over 6-million titles listed ranging across all genre of books.”
The company plans to have an investment fund of $6.5 million to roll out the grand plan. This investment will be used mainly in scaling-up its warehousing capacity, back-end technology and product portfolio. The fund is expected to be sourced from internal accruals and venture capital firms. In fact, recent reports stated that the company has received a VC funding of $10 million from New York-based investment firm Tiger Global Management.
With Flipkart’s aggressive growth plans, growing online users and an increasing acceptance of e-commerce in India, the company’s move seems to be quiet an interesting watch. However the question remains: Can Flipkart succeed in its diversification strategy? Let us know your thoughts.
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