Flipkart.com the ecommerce portal that started its journey by selling books has big plans for the future. Currently the Bangalore based Flipkart sells over 2,00,000 books annually and has expanded its product offering to music, mobiles, consumer electronics and games.Flipkart’s Founder and CEO, Sachin Bansal made his big plans apparent when he said, “We aim to be a USD 1-billion (Rs 4,500-crore) company over the next 3-years. We are growing at a CAGR of 700 per cent in the last two-years and hope to maintain that. We expect revenue to grow multi-fold on the back of our major expansion plan,”
Flipkart’s current turnover is expected to be around Rs 75-crore this financial year. Sachin expects to do 7 times the topline each year and feels that this goal isn’t ambitious. To support this ambitious growth plan Flipkart is investing Rs 30-crore in warehousing capacity, IT, technology, back-end and infrastructure. Last year Flipkart raised 10 million $ in funding from Tiger global. It seems the same is being deployed in expanding the scope of products on offer on the website.
Our Take On 700% Growth Story
While we like Sachin’s enthusiasm it seems a bit out of reach when you talk of maintaining a 700% growth YOY. Ecommerce is bound to hit a ceiling due to the lack of payment mechanisms as well as the lack of trust people have on using their credit cards or any digital form of payments online. While it may have grown dramatically in the last 2 years we expect a slowdown in the growth. Though we do believe that Flipkart will continue to grow with a high percentage multiple of topline revenue year on year we seriously doubt it will be 700%.