 "Fashion technology to real estate: What Flipkart could splurge on with $1bn funding")
After raising around $700 million since inception, Flipkart has made a quantum leap forward by raising $1 billion (approximately Rs 6,000 crore), the largest amount ever raised by an e-commerce company in India. But what could Flipkart be planning with a war chest of this size?
While the obvious plan would be to expand its reach across the country in order to gain a foothold and larger market share before competitors like Amazon do, here are some other uses that the $1 billion could have for the e-commerce site:
More acquisitions, product categories: While announcing the $1 billion funding,SachinBansal, co-founder, Flipkart said the company would look at acquisitions and in deepening existing investments. Mobile commerce, payments and improving customer and seller experience would be key focus areas.
The e-tailer has been expanding categories rapidly with the addition of categories like sexual wellness and e-learning as it expands its reach across diverse categories. Among the categories it is reportedly readying to launch soon is furniture in which there are other players like Pepperfry and Urban Ladder.
Moreover, in another interview with the Economic Times, the Bansals said that fashion technology is also an exciting space. “We will closely watch and make investments in areas such as wearables, watches and eyewear…
Myntra and Flipkart put together is now over 50% of the fashion retail market in the country. Fashion has become the largest in unit sales for us since we bought Myntra. Over one third of our sales come from fashion category now. We are going to invest a lot in the fashion space and create fashion labels,” Bansal told ET.
Is another Myntra-style acquisition in the offing?
Warehousing, logistics: Another theory isthat the company could be investing in greater warehouse automation in the six warehouses that it has in six cities and also to expand its warehouses in other smaller cities. While Amazon is famous for its gigantic warehouses in the US and automation, Flipkart can hope to cut down delivery time and increase efficiency with this move. Its logistics firm, eKart, could also be made available to other e-commerce companies.
Office space: Flipkart is reportedly set to sign one of the biggest real estate deals in Bangalore with company approaching real estate developers seeking 4 lakh sq feet of office space, reports The Times of India. With 12,000 staff, which is reportedly an increase of the five-fold increase of staff in the past year, the company is looking for a lot more office space and will keep some money in the bank for it.
Hiring: The company had a headcount of 2,500 in October 2013, but has since expanded it to 12,000. This is expected to double over the next year to 25,000 and the company would need enough cash in its kitty to maintain this workforce.
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