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Home » Business » Business Models » Business Model of Flipkart – How Flipkart
Makes Money!

Business Model of Flipkart – How

Flipkart Makes Money!
October 13, 2021 By Hitesh Bhasin Filed Under: Business Models

Founded in the year 2007, Flipkart is an e-commerce giant that commands close to an impressive
40% of the market share in the Indian e-commerce industry. Founded by Sachin Bansal and Binny
Bansal, the business model of Flipkart initially channelized revenues through book sales. Now, it
comprises a wide range of product categories such as fashion, consumer electronics, lifestyle
products, and so on.

In this post, we will be covering all the important details associated with Flipkart Business Model to
understand how it functions and how it generates its revenues.

So, without any further ado, let us get started.

Table of Contents

Introduction to the Business Model of Flipkart

When there is a discussion about the sites that provide the best space for online selling in the world,
Flipkart is one of the names that always come to the minds of people these days.

It is no doubt one of the best online selling platforms for the customers who are in need to get
different products for themselves.

With the increase of online shopping in the world, sites like Flipkart have risen to the fame, and there
is no doubt that Flipkart is trying to make the most out of the situation by creating amazing services
for the people so that the company can earn more and more money.

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Since Flipkart is one of the most popular sites that people use for online shopping these days, people
need to know how the Flipkart business works in the first place and how it can make the amount of
profit that it makes in the best way.

So, to do that, people need to get to know the business model of Flipkart. That is one of the main
reasons why we are going to have a little discussion about it.

With the brief analysis of the Flipkart Business model and the background of the company, the people
will be able to know the working procedure that the company uses and what future holds for the
online shopping store for the people.

As I had said earlier, the company of Flipkart was founded by the Bansal duo, Binny and Sachin and
that too in the year 2007.

Despite being a pretty new company in the world of e-commerce, it quickly rose to fame and became
one of the biggest and the most amazing sites that people tend to use for an amazing online
shopping experience.

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The company was an e-commerce one, and it was registered in the area of Singapore.

The headquarters of the company was in Bangalore.

First of all, when the company started, it was a site where people could find some books online.

However, the times have certainly changed right now, and there are so many amazing things that the
company has to offer to the customers these days. There are about 20 million products available on
the site of Flipkart, and there are more than 70 different categories for the products as well.

As per the recent statistics, the company has around 30,000 employees.

By the end of March 2018, annual revenues generated by Flipkart were $ 3.8 billion (Rs. 26,925 Crore).
As of now, the company’s total valuation is $22 Billion.

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Let us now dig deep into the world of Flipkart to understand how it has become an e-commerce giant
now-

Deciphering the Business Model of Flipkart –

What has made Flipkart the Ecommerce Giant
of India

There is no doubt about the fact that Flipkart is one of the most amazing and useful online shopping
sites for people these days. However, to have a better understanding of the company, people need to
know about the business model that Flipkart has in the first place.

Flipkart is a site that uses the B2C or Business to Consumer business model for the success of the
company.

That means the business can provide the best of the support to the customers who want to have it in
the first place. With the help of Flipkart, the sellers will be able to sell their collections in the best way.

If there are any product collections that they have, then they will be able to provide these products to
the people. They can provide some discounts on the products as well to make sure that people are
attracted to buy the products that they have in line for them.

The customers then visit the website of Flipkart and have a look at the products that are available
there to decide whether they want to buy it or not. After the product has been ordered, it will be
shipped and delivered to the address of the customers.

The sellers always have an agreed and fixed price that is offered on the website.

This fixed price is set after deducting the basic commission that Flipkart gets from the sellers for the
services that are provided to them in the first place.

This is one of the best models that are used by the company of Flipkart, and there is absolutely no
doubt that people will definitely be able to understand the process more if they know the business
model of the Flipkart company in the best way.

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Customers targeted by Flipkart Business Model

#1. Urban Buyers

Urban market is one of the most powerful audience bases of Flipkart, as it easily avails their products
and services with personalized offers, discounts, and payment methods.

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#2. Internet Users

Buyers who are online are also the key target of the business model of Flipkart. Via analytics, the
company knows about the inclinations of these users and hence runs customized campaigns to
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#3. Discount Seekers

All those buyers who prefer buying products at a discounted price are the prime target of Flipkart;
the company comes with special offers, discounts, and coupons to help such buyers get the products
at markdown cost.

#4. Customers looking for Ease of Shopping

In case you want the ease of shopping, you are also a target customer of Flipkart. Means those who
want to fulfil all their requirements just by sitting at their homes, Flipkart serves them well even at the
discounted prices.

#5. Buyers inclined towards specific products

People who do online searches for specific types of products are also the target base of Flipkart.
Analytics help Flipkart to know about those searches and buyers. This way, the company showcases
the ads to those customers on their browsers and devices to convert them as the buyer.

Now, as you are aware of the customers of Flipkart, the next key thing about the business model of
Flipkart is its value propositions-

Value Propositions comprised by Business Model of Flipkart

Product Launches related to Electronics, Home & Furniture, Baby & Kids, TVs &
Appliances, Sports, Books & so on
Personalized features such as Customer Account with Login & Signup, Selling
services on Flipkart as a Seller, Advertising Opportunities, 24x 7 Customer
Services, Software Application (Dual Interface), Flipkart Assured Badge
Highly Convenient Services, Wide Product Range, Easy Delivery and Discount
Offers

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Channels of Business Model of Flipkart

Flipkart comprises a wide range of channels for effective channelization of its business model. Let us
have a look at those here and now-

#1. Website
This includes o#icial Flipkart site and Flipkart Plus along with Seller Program and A#iliate Programs
that enable Flipkart to reach to its customers.

#2. Applications
Flipkart Online Shopping App and Flipkart Seller Hub are the parts of this channel.

#3. Social Media Platforms

Different social media platforms such as Facebook, Twitter, LinkedIn, Instagram, YouTube, Google+
are used as channels.

Key Elements of Flipkart Business Model

In the key elements, first come the partners that help in channelizing business model of Flipkart and
they are-

Authors and Publishers

Different Subsidiaries such as Myntra, PhonePe, Jobong.com, LetsBuy, eBay.in
and EKart
Walmart that owns 81.3% of Flipkart
Manufacturers, Sellers, and distributors of products
Payment Partners

Next element that you need to understand here is the resources that help business model of Flipkart
generate funds. Some of them are-

Venture Capital Fund Partners such as Accel India, MIH (Naspers Group Sector),
Tiger Global, ICONIQ Capital
The immense flow of tra#ic around 100 million per day
Payment Resources such as COD, Credit Card, Internet Banking Services,
Payment Apps

Now, you should look upon the activities that the business model of Flipkart needs to channelize-

Offering 24/7 customer service via phone, email, phone, and chat
Ensuring a secure payment gateway
Designing, developing and optimizing the Flipkart Platform
Ensuring top-notch supply chain management
The managing network of sellers
Hiring, training and retaining the workforce
Effective management of product catalogues
Marketing, sales promotion activities and their role in deciding the pricing
Offering different promotional offers and discounts as per different occasions
Proper channelization of partnership with manufacturers and distributors

All these activities also play a key role in deciding the cost structure of Flipkart Business Model. Key
parts of cost structure are-

Warehouse management and deliver cost

Technology and infrastructure support cost
Workforce maintenance cost
Advertising & Business Promotional Expenses

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So, these were some of the key elements upon which the business model of Flipkart is based upon.
Now, we will understand how Flipkart generates its revenues-

How Does Flipkart Make Money?

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There are many different options that are provided to the customers through the help of which they
will be able to buy and sell the products in the best way to the customers out there.

#1. Via Flipkart Website

There is a Flipkart website that they can use in order to list their products so that people can buy
them. Also, there is a web application that is provided by the Flipkart Company as well.

The website and the web application are two of the most important aspects which play a great role in
the generation of revenue for the company in the best way.

#2. Via Mobile Application & Social Media

Also, there is a mobile application which can be used by the customers for a fantastic experience of
online shopping from a mobile phone.

Apart from that, Flipkart also uses the amazing social media websites for the promotion of the
products, and there are a#iliate-networks of the company as well such as websites, bloggers, coupon
websites, review websites and so much more.

#3. Commission Structure

The commission that is charged by Flipkart is also one of the main reasons why the company is able
to make so much money in the first place. The commission that is taken by the Flipkart Company from
the users actually depends on the product and the sales-type that they tend to have all the time.

There are 5% to 20% of the taxes on the product and the discounts as well.

So, there is no doubt that the company is able to make a lot of money from product sales and the
other forms of commission in the best way.

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#4. Listing fee and Convenience Fee Options

Apart from that, the business model of Flipkart also derives revenue from some listing fee options and
the convenience fee options provided, which is possibly another best way to generate additional
revenues.

With the help of the amazing listing fees and convenience fees, the company is able to get some
money from the sellers who want to list their products on the site and the application so that the
people are able to see it when they are visiting the site on their online shopping times.

#5. Logistics and Shipping

There are some other sources of income as well in the business model of Flipkart, such as the
logistics options. This is the amount that is collected from all the sellers for the shipping of their
products in the best way.

The service is basically similar to the ones that are provided by the other online delivery companies in
the best way. E-Kart is the online shipping service of Flipkart.

Not just that but digital media and ads are some of the most amazing ways with which the company
of Flipkart can add some revenue to the profits in the best way. There are ads which are sold to the
brands and the companies to get the profits.

Apart from that, the site of Myntra is another form of revenue generation for the company.

So, these are some of the details that one needs to know about the business model of Flipkart.

What do you think about the business model of Flipkart? Share your views in the comments below.

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About Hitesh Bhasin

Hi, I am an MBA and the CEO of Marketing91. I am a Digital Marketer and an
Entrepreneur with 12 Years of experience in Business and Marketing. Business
is my passion and i have established myself in multiple industries with a focus
on sustainable growth.

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