India’s e-commerce posterboy Flipkart has set a target to double its gross merchandise value (GMV) of products sold to $ 8 billion (around Rs 50,000 crore) by December this year from close to $ 4 billion now, company sources said.
The target was decided upon at the company’s recently-held board meeting in Singapore, post which co-founders Sachin Bansal (CEO) and Binny Bansal had taken Flipkart’s top leadership for an off-site to share the goals with them.
Flipkart has also set a target to ship one billion units a month and to serve 100 million customers by 2018. Currently the company ships around 8 million units a month.
The targets were announced to the employees of Flipkart during a townhall recently.
GMV is a term used in online retailing to indicate the total sales value for merchandise sold through the marketplace over a period of time. Most e-commerce companies refrain from sharing their exact revenue, making GMV run rate a parameter used often to gauge the financial health of an online retailer. The actual revenue is a small proportion of the GMV for any company.
If met, the target for 2015 will widen the gap between Flipkart and its rivals like Snapdeal and Amazon India further. Industry sources estimate Amazon India’s GMV at over $ 1 billion, while Snapdeal has said that it aims to touch a GMV of $ 3 billion by March 2015.
In valuation, Flipkart has already zoomed past competition, as the company is now valued at around $ 12.5 billion, according to a source.
The e-commerce sector in India is in a hyper-growth mode mainly due to a high penetration of smartphones and internet in the country. India currently has the world’s third-largest population of internet users, even as only a fifth of the country’s population is online.
The year 2014 was a breakthrough one for several e-commerce players as they did not only raise multiple funding rounds at steep valuations, but also saw a sharp surge in sales.
Flipkart grew five times in volume of products sold between 2013 and 2014, while Snapdeal spoke of a 6 times growth in gross sales value in 2014 compared to 2013.
Consulting firm Technopak estimates the Indian e-tailing market will be worth $ 32 billion in 2020, more than 10 times its value of $ 2.3 billion in October last year.
To fuel its growth plans, Flipkart is working on several discount and sale events during the year, and will perhaps do another ‘Big Billion Day’ in the coming months. The company had first held the ‘Big Billion Day’ in October 2014, when the company had said that it clocked a revenue of $ 100 million in only 10 hours on the day of the sale.
Starting Friday, Flipkart is holding a two-day fashion and lifestyle sale, which is the first category-discounting event by the company. Over the two days, the portal will run around 250 offers on several brands and also host many steal deals.
Lifestyle and fashion is expected to be categories that drive growth for e-commerce portals in the near-future. Flipkart along with Myntra, which it had acquired earlier, are believed to hold around 45-50% of the online fashion and lifestyle retail market.
* Double GMV to $ 8 billion by Dec 2015
* Ship one billion units a month by 2018
* Serve 100 million customers by 2018
* Valuation at $ 12.5 billion
* GMV at $ 4 billion
* Ships around 8 million units/month