Entrepreneurship is never easy. But, lately e-commerce poster boys from India are seen flaunting their million-dollar paychecks that they could gather in less than six years after starting Flipkart. Sources say that Flipkart founders and IITians Sachin Bansal and Binny Bansal took home a handsome remuneration of Rs 10.25 crore ($1.7 million at current forex rates) each in the six months between September 2011 and March 2012, showed the latest filing with the corporate affairs ministry.
The filings are seen to be following a restructuring of the Flipkart ownership that is with the Singapore-based holding company after the FY12 rejig. This awesome number even outnumbered their American e-commerce peers. It will prove to be a testimony to investor faith in the burgeoning domestic e-commerce story. Another news reveals that Darrell Cavens, co-founder and CEO of US-based Zulily, a shopping portal for moms, which recently filed for a $100-million IPO, took home $290,000 (Rs 1.74 crore) in the last calendar year, including bonus payout.
Flipkart has been making a successful online presence with its host of items like books, mobiles phones to stationery and perfumes. It has been successful in raising $540 million (nearly Rs 3,315 crore at latest forex rates) since 2007 from leading investors, including South African media giant Naspers, Tiger Global, Accel Partners, Dragoneer, Morgan Stanley, Sofina and Vulcan Capital. However, the latest $360-million fund-raise, that closed last week valued the Bangalore-based company at $1.5 billion (over Rs 9,200 crore).
Flipkart reports an annualized gross merchandise sale (or total value of transaction) of about $600 million (over Rs 3,680 crore). Sources say that it is planning to take the annual gross sales to $1 billion (over Rs 6,100 crore) in the next 12 months and only after that start working on the overseas listing. A research firm Forrester opines that India’s e-commerce market is expected to touch $8.8 billion (over Rs 54,000 crore) by 2016.
Well, Flipkart is not that old in the market. It started only 6 years ago. It is a living example of marketing and management and how things work out perfectly fine with the right strategy. Flipkart has been able to set a benchmark for online shopping in India.
We Indians need to welcome such swaraj organizations so that they are able to stand against likes of Amazon and many. Chinese online retailer -ALIBABA- is estimated to over take Amazon as the world’s largest online retailer by 2015. The sole reason being that the Chinese are very particular about supporting their own native companies. Flipkart should adopt such strategies as increasing their standards and quality of delivery. Also they should invest profits in partly owned express delivery services.
Being a frequent shopper at e-commerce sites I could definitely feel a difference in my life. It saves time and other resources too. India needs more entrepreneurs like them. Their risk really paid off owing to where they stand now.
Akshay Agarwal
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