With $1B funding, Flipkart fires salvo at Amazon: We’re going to be the Alibaba of India

India’s biggest ecommerce site Flipkart is often benchmarked against Amazon. People ask: Can it be the Amazon of India? But today, Sachin Bansal, cofounder and CEO of Flipkart, set the record straight. With US$1 billion of fresh funding under its belt, Flipkart, he pointed out, is in the same position as Alibaba was in 2005. “We want to shape the ecommerce ecosystem in India. We want to be India’s first US$100 billion technology company,” he added.

Just as the Chinese company dominates China’s ecommerce market, Flipkart wants to establish itself as India’s homegrown ecommerce leader, keeping global giants like Amazon at bay.

The US$1 billion funding for Flipkart is just as mind-blowing as the recent US$1.2 billion funding of global transportation company Uber. The rationale for it is the huge untapped potential of Indian ecommerce. Just look at the numbers: India now has nearly 250 million internet subscribers – second only to China – according to the Internet and Mobile Association of India (IAMAI). What’s more, nearly four-fifths of the 1.2 billion population have yet to get online. And even among those accessing the internet, only about 10 percent are currently shopping on ecommerce sites. But now, with affordable smartphones in the hands of the masses, the number of online shoppers is projected to double in the next three years.

Mobility is one of the focus areas for Flipkart. Sachin Bansal said sometime back that Flipkart would soon become an mcommerce company, and the new funding is likely to position it for this rapidly changing scenario. “India is at an inflection point right now. In a couple of years, 500 million people from all over the country will get online through their mobile phones. Shopping will have to be very different then. This funding is all about making it happen,” he said today. “Twelve months ago, just five percent of our revenue came from mobile shoppers. Now, 50 percent of our shoppers are mobile users.”

Flipkart had already adopted an intelligence@scale motto with an emphasis on mcommerce. Data scientists are busy using the huge customer and transaction data coming their way to cater to specific Indian needs through personalization as well as intelligent supply chains and logistics. And a mobile-first market like India offers unique opportunities for ecommerce companies. “Data that can be gathered through mobile phones are 10 times that from personal computers. Users tend to spend more time on their phones. And phones have multiple sensors, GPS, camera, and so on. There is a huge opportunity in making mobile shopping a much more personal experience using this tremendous amount of data,” Sachin Bansal said.

Flipkart will also look at strategic acquisitions with the financial muscle it now enjoys. It will look for strong players in a whole gamut of technology, from wearables, robotics, virtual reality, and artificial intelligence to mobile apps. “If we find anyone better than us in something that we want to do, we will either enter into strategic partnerships with them or acquire them,” Bansal said.

See: Is this Flipkart’s secret weapon to beat Amazon?

Creating thousands of ecommerce entrepreneurs

Binny Bansal, cofounder and CTO, emphasized that this billion dollar funding wasn’t just good news for Flipkart but for the entire ecommerce ecosystem in India. Flipkart has over 3,000 retailers selling on its marketplace currently. Many of them had turned into internet entrepreneurs for the first time through it. The fresh funding allows Flipkart to think big for them as well. “We want to create thousands of entrepreneurs, build a robust support system for them, and innovate for them. We can now afford to think of problems like how to solve packaging or cataloguing for hundreds of thousands of sellers. We want to create a whole new ecommerce entrepreneurial ecosystem here,” he said.

The US$1 billion funding for Flipkart also reinforces a trend of tech companies being in no hurry to go public. While Amazon took just three years to list, Sachin Bansal pointed out that the Chinese ecommerce giant had taken nine years before deciding to go public on Nasdaq. So it is early days yet for Flipkart, which is happy to keep growing its business with the backing it is receiving from its investors.

The current round is led by its existing investors, Tiger Global and Naspers. Others – Accel Partners, DST Global, ICONIQ Capital, Morgan Stanley Investment Management, and Sofina – participated. Singapore’s sovereign wealth fund GIC is the only new investor. Interestingly, it is one of Alibaba’s investors too, and has stakes in another Chinese ecommerce company JD.com (a.k.a. Jingdong). “All of these investors are in this for the long term. So we have no pressure to go for IPO any time soon. Our business model is still evolving. It will take time to settle, and only then will be think of an IPO,” the Bansals said repeatedly.

Lately, investment dollars have been pouring into India. Flipkart alone has raised US$1.75 billion in funding, including its whopping eighth round announced today.

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