SYMBIOSIS INSTITUTE OF MANAGEMENT STUDIES, PUNE

(A constituent of Symbiosis International University, Pune)

OPPORTUNITY EVALUATION

SACHIN BANSAL FLIPKART

A report submitted in partial fulfilment for the degree of masters in business

administration

Submitted by:

Parijat Biswas D33

Poulami Sarkar D37

Surbhi Telang D54

Submitted to:

Dr. Amit Kr. Agarwal

SIMS, Pune

January, 2017
 OPPORTUNITY EVALUATION

SACHIN BANSAL FLIPKART

A BRIEF HISTORY OF SACHIN BANSAL AND THE TRENDS OBSERVED BY HIM AND HIS
CO-FOUNDER BEFORE COMENCING FLIPKART:

Sachin Bansal is an Indian Software Engineer born on 5th August 1981. He is known as one of
the successful entrepreneurs who initiated an e-commerce platform. He is an internet
entrepreneur who co-founded FLIPKART. Sachin is basically from Chandigarh and is a
computer science engineer from Indian Institute of Technology, Delhi.
Flipkart is an electronic commerce company founded in 2007. It is headquarter in Bangalore,
Karnataka.
While it is registered in Singapore. According to Morgan Stanley, the current market value of
Flipkart, as of November 2016, is $11billion.
The organization started by Sachin was no exception but he truly believed that it is not the idea
but the conviction with which these idea are converted actions and these actions into result which
defined his success story. And therefore, FLIPKART has been a huge success.

Lets look at the story of SACHIN BANSAL and the trends and opportunities which he and his
co-founder used for the success of the company.

In 2007, when the company was launched, the e-commerce field was taking its beginner step in
India. The company was registered in Singapore but is headquartered in Karnataka, India (in the
city of Bangalore).
After completion of degree Sachin joined Techspan Company where he worked for almost 6
months. In 2006, he joined Amazon.com as a senior software engineer, where he met another
alumnus of IIT, Delhi Binny Bansal. After working at Amazon.com for next 6 months, they
both decided to leave the organization to start their own business.

**Just for a matter of fact, both share a common surname but are no way related**
In a country like India, where people have ample of tastes and preferences, it was risky to think
of a start-up like this which totally focused on e-commerce. On one side, where the e-commerce
was growing at a good pace, it had enormous risk factors attached along with it.

Both the entrepreneurs decided to pool in Rs.2 lakh each and with two computer systems
launched their website from their 2 bedroom flat Koramangala, a locality in Bangalore where the
company now number of branches. This company was incorporated under the name Flipkart
Online Services Ltd.

In the initial days of Flipkart, they both used to deliver books across Bangalore on their scooters.
For the initial 10 days, the site did not receive any sale. The first product they sold was a order
from Hyderabad for the book Leaving Microsoft to Change the World' by John Wood. The
organization now employees around 33,000 people across the country. They started just by
selling books and expanded at an unbelievable pace. It launched its own range of products like
tablets, USBs and laptop bags under the name DigiFlip.
A perfect epitome of Innovation, it is a home of some striking features of Indian E-commerce. It
provides a payment platform which on other e-commerce platform ever did in the initial days. It
included cash on delivery, credit card transaction, debit card transaction, net banking, e-gift
vouchers and card swipe option on delivery of products.

Back to the time, when both launched the company, the major problems faced were :
1. Online payment gateways
2. Supply chain system
Today, SACHIN BANSAL stands as the Chairman of Flipkart and BINNY BANSAL as the CEO.

SOURCE: https://yourstory.com/2014/08/sachin-bansal-flipkart-journey/
SOURCE: https://yourstory.com/2014/08/sachin-bansal-flipkart-journey/
THE GAPS AND CHALLENEGES FACED BY SACHIN BANSAL BEFORE
VENTURING INTO THE FLIPKART OPPORTUNITY

Before stating Flipkart Sachin Bansal was working in Amazon. The provenance of the
idea of starting up of this company came up from the poor quality service that was being
provided by their competitors.
He realized that India has not been explored on the grounds of e-commerce market and
the competitors have not yet been able to tap the market and reach out to the people and
thus decided the business model to reach out to maximum of the market.
They had a better technological background and set up and thus they could facilitate
everything pretty easily and could cut down on initial costs and keep it low.
The supply chain management of the competitors were not as good and Sachin Bansal
identified this gap and took the opportunity by launching his own logistics.

In a country like India where people have variety of tastes, choices and preferences, E-commerce
had always have faced challenges in survival and make profit. Similarly, Sachin Bansal as well
before venturing into Flipkart had faced many challenges, a few being;

People in India are pretty sceptical towards buying and shopping online. They prefer to
touch, feel, try on and then select what they buy or want to buy.
Another very big challenge that they faced was funding. Flipkart somehow in the
beginning arranged some funds from venture capital funding and later based on their
performance they received more funding and the faith that the investors had, they
preserved it.
Another major problem faced by Flipkart was the safety measures in payment gateways.
Online transactions for shopping was not something that people were used to and found it
a rather complex procedure. That is when Flipkart introduced Cash On Delivery for the
very first time which was another big reason for them towards their success.
 Supply chain system was another major challenge that they faced. Getting all the goods
and stuff delivered on time and in good condition. The whole logistics was a great
concern to them and they resolved this issue by introducing their own supply chain called
E-kart.
Last but not the least, a very generic yet inevitable challenge was building the trust factor
and getting reliable people in the organisation. They started finding such people and
maintained very good business relations and also made them a part of their Flipkart
family in such a way that the bond made was not easily broken.

SACHIN BANSAL: PERSONAL CHARATERSTICS

BOLD RISK TAKER:

Started one of the first e-comm. companies in India when nobody thought of selling
goods & products on online platform
Acquired Myntra and later on Jabong thus eliminating competition to a major extent

SEDULOUS:

Founded Flipkart with Binny Bansal with a mere sum of Rs. 4,00,000, also delivered
books and other goods in Bangalore during initial phase
This in turn helped them gain customer insights
Worked hard to get vendors and payment gateways linked to flipkart

VISIONARY
Desires to make Flipkart as a $100 bn company in the near future
Introduced the concept of online shopping to India which was dominated by physical
stores
FLIPKART: PORTERS FIVE FORCES MODEL

THREAT OF
NEW
ENTRANTS

SUPPLIER BUYER
POWER RIVALRY POWER

THREAT OF
SUBSITUTES

SUPPLIER POWER:

Industry characterized by manufactures as suppliers of finished goods, e.g. Adidas,

Lenovo, Prestige, Ray Ban, etc
Various products in numerous categories sold by these online retail stores
As many suppliers are available for any particular/specific category, therefore they cant
exert much pressure on online retail cos.
Because of logistical nightmare, it becomes strenuous for manufacturers to enter into this
industry/field
Online channel is very important as it serves as one of the most chief channels to sell
finished products
With Indian customers going online for purchasing various goods and products, the cant
take the chance of losing this channel
So supplier power comes out to be low
BUYER POWER:
Industry is having a lot of players which provides the buyers with a number of options
Switching costs are also low & same or similar products are displayed on many online
retail stores which implies that product differentiation is little
Above factors results in high buyer power

THREAT OF NEW ENTRANTS:

Because of leverage from government in FDI, foreign companies can easily enter into
this particular industry
This industry is characterized by very smaller no. of entry barriers like low capital, less
infrastructure, therefore any company with adequate no. of suppliers, website and
payment gateway can open up a online retail store
With this industry estimated to be touching $76 bn by 2021, many companies wouldnt
like to miss this golden opportunity
So, abovementioned reasons makes the threat of new entrants quite high

THREAT OF SUBSITUTES:
As online shopping saves time, effort & money, at the same time providing with lot of
options, people go for online shopping instead of visiting physical stores
As far as quality of products is concerned, both provide same quality products making
threat of substitutes low

RIVALRY INSIDE INDUSTRY:

High as many players are giving cut throat competition like Amazon, Shopclues,
Jabong, etc
SOURCES:

https://successstory.com/people/sachin-bansal
https://en.wikipedia.org/wiki/Flipkart
https://en.wikipedia.org/wiki/Sachin_Bansal
https://successstory.com/companies/flipkart
http://articles.economictimes.indiatimes.com/2014-03-
10/news/48083953_1_sachinbansal-flipkart-amod-malviya
https://yourstory.com/2014/08/sachin-bansal-flipkart-journey/
https://successstory.com/companies/flipkart
http://www.slideshare.net/PreetiAcharya/porters-40340130
https://yourstory.com/2010/05/sachin-bansal-and-binny-bansal-founders-flipkart/