Flipkart on track to a ten-fold growth this fiscal

Bangalore-based Flipkart, India’s answer to Amazon and the first billion dollar internet company in India, is expected to grow by more than ten times over this financial year, according to BusinessWeek. Generating $11 million in sales over the last financial year, it expects revenue to reach $100 million this year and hopes to reach $1 billion by 2015 . Its growth predictions are based on the increasing size of the e-commerce market. Currently shipping 30,000 items a day, Flipkart is planning to introduce new product categories to make the most of that expansion. Ravi Vora, Flipkart’s vice president of marketing, told BusinessWeek:

“The base of Internet users in India has multiplied almost 10 to 11 times in the last six years. People in India are now also more comfortable shopping online than they were before.”

A survey by the Associated Chambers of Commerce and Industry of India estimated that the e-commerce market  could grow from its current Rs 20 billion to Rs 70 billion ($1.33 bn) by 2015, based on increased access to the internet. [caption id=“attachment_138693” align=“alignleft” width=“380” caption=“A screen grab of online shopping website, Flipkart.com”]  [/caption] At the moment, India has over 100 million people online, with about 17 million using the web for shopping. The Indian government wants to increase the number of broadband connections to 175 million by 2017 and 600 million by 2020. If that drive is successful, the market for e-commerce ventures in India will blossom. Flipkart, of course, has first mover advantage. Started in 2007 by ex-Amazon employees Sachin Bansal and Binny Bansal, it started by offering books but quickly diversified into mobile phones, appliances, gaming consoles, music and movies. It also gives customers the flexibility of paying by cash on delivery or in instalments, the kind of payment flexibility essential in a country where only 18 million people use credit cards. Whether Flipkart can retain its dominant position, when Amazon does finally enter the Indian market, remains to be seen. Earlier this month, the Times of India reported that Amazon is opening offices in Hyderabad, employing 3,300 people. Rumours are that Amazon will open in India in 2012. Well known for driving prices down, Amazon will give Flipkart a run for its money, particularly as Flipkart doesn’t necessarily sell at the cheapest price point. However, it does offer a 30-day return policy and provides some of the fastest shipping in the country, using its own couriers . The question is, will that be enough for it to hold on to its position as top dog and meet its growth targets?