Nov. 23 (Bloomberg) -- Flipkart.com, an Indian retail website, expects sales to grow more than 10-fold this financial year as Internet usage in the country increases and people get accustomed to making purchases online.
“The base of Internet users in India has multiplied almost 10 to 11 times in the last six years,” Ravi Vora, vice president, marketing, said in a telephone interview. “People in India are now also more comfortable shopping online than they were before.” The company’s sales in the year ended March 2011 were about $10 million, he said.
Flipkart, backed by New-York based Tiger Global Management LLC, ships as many as 30,000 items each day, Vora said. The company, based in Bangalore, plans to introduce new product categories to meet rising demand and invest in logistics and technology, he said, without specifying a figure.
The online retail market in India may grow to 70 billion rupees ($1.33 billion) by 2015 from 20 billion rupees in 2011 as Internet access improves, according to a July survey by the Associated Chambers of Commerce and Industry of India. Prime Minister Manmohan Singh’s government wants to boost the number of broadband connections more than 10-fold to 175 million by 2017, and 600 million by 2020, according to the draft of a proposed new telecommunications policy released in October.
“Flipkart is India’s answer to Amazon, until Amazon really makes its big entry,” said Shaily Shah, an analyst at Gartner Inc. in Mumbai. “Flipkart has the first-mover advantage and it has understood the consumer mindset very well.”
Former Amazon.com Inc. employees Sachin Bansal and Binny Bansal started Flipkart as an online bookstore in 2007. The company later introduced electronic items such as mobile phones, televisions, cameras, laptop computers and home appliances such as refrigerators and vacuum cleaners.
Cash on Delivery
The Internet retailer gives customers the option to pay cash on delivery for purchases made on the site, allaying fears of online transactions and expanding its reach to households that don’t have credit cards. It also offers goods on installments.
“Flipkart’s inventory management, customer satisfaction and delivery are pretty good,” said Abhishek Ranganathan, an analyst with MF Global Sify Securities Pvt. “When you are able to deliver products in two or three days, it increases the confidence the consumer has in the website.”
--With assistance from Ketaki Gokhale in Mumbai. Editors: Abhay Singh, Sam Nagarajan
To contact the reporter on this story: Malavika Sharma in New Delhi at firstname.lastname@example.org
To contact the editor responsible for this story: Stephanie Wong at email@example.com