INTRODUCTION TO COMPANIES – FLIPKART AND MEESHO

FLIPKART

Flipkart Private Limited is an Indian e-commerce company, which was founded in 2007 and is

headquartered in Bangalore, Karnataka. Founded by Sachin Bansal and Binny Bansal, no

relation between each other, and who are also alumni of IIT Delhi and were also former

employees of their current competitor, Amazon. The founders of Flipkart wanted a name for

the company which could speak beyond books, and they chose Flipkart, means easily translates

to flipping things into a shopping (k)art. The current CEO of Flipkart is Kalyan Krishnamurthy.

The company’s vision is to provide a delightful customer experience and its vision is to become

the Amazon of India. Flipkart had started off as a company that focused solely focused on the

sales of books online in 2007, along with an extensive country-wide shipping system. Flipkart

then further launched their own 24x7 customer support in 2008 and was finally taking off at

this stage, with almost 150 orders per day at the time. The big breakthrough of Flipkart

happened at the back end of 2009 and at the start of 2010, when the company shifted their

focus from just books to now expanding sales of other products in categories of fashion, home

appliances, lifestyle products, healthcare, electronics such as televisions, home theatres and

various other products. The company currently stands at having 100 million registered users

and over a million sellers on their platform who offer customers to choose from almost 80

million products under 80 categories, with a huge capacity of delivering 8 million shipments per

month with 21 warehouses around the country.

Flipkart can be considered as to bringing in a revolution into the e-commerce market by

introducing exclusive and new features of a 30-day return guarantee and Cash on Delivery

(COD) and card on delivery which had a very positive impact when introduced as it worked well

for current and future customers of the platform. The cash on delivery method especially was a

great success because at the time of an uncertainty of online marketplaces and customer’s fear

of online payment due to fear of fraud or loss, the COD option played a very vital role in

acquiring of customers and building the confidence of customers in their platform which also

resulted in them tackling one of the major problems at the time. This move also helped the

consumers in a way of them slowly transitioning into the field of online shopping, rather than

just shopping from offline and physical stores. Flipkart has since enjoyed a very steady growth

in this market after the introduction of these features in 2011. In 2012-13, they launched a new

and immersive lifestyle and fashion portfolio, along with a scheme of same day delivery

guarantee whenever possible at a cost. . Flipkart also launched another feature called the

Flipkart First, which was an annual subscription service that was designed around offering their

subscribed customers various other benefits and services like an unlimited access to free

standard delivery with no minimum purchasing price, a guarantee on same-day delivery at a

discounted price and a 60-day return and replacement guarantee, rather than the normal 30

day limit for regular users.

Flipkart started taking shape and became one of the leaders in their industry, after they

received their biggest funding at the time of $1 billion, with some of its biggest investors being

Microsoft, Qatar Investment Authority, Morgan Stanley, Naspers, etc. Flipkart’s biggest rival in

its industry is Amazon.

In the context of Mergers and Acquisitions, we can see that Flipkart is not averse to acquisitions

as in its time, the company has acquired various other companies and competitors. Some of the

major acquisitions that have been undertaken by Flipkart are the takeover/acquisition of

Myntra in 2014, with a 100% stake for an estimated amount of 2000 crores. Flipkart also

acquired PhonePe in 2016 and then partnered with YesBank to create India’s first UPI-bases

mobile payment app. Other acquisitions include eBay India, Jabong, Mime360, and FX Mart

among others. Flipkart also were in talks to merge with Snapdeal, but that reached a dead end

due to a variety of reasons and a deal involving very complex structures.

MEESHO

Meesho is an Indian e-commerce platform, that was founded in 2015 by graduates from IIT

Delhi, Vidit Atre and Sanjeev Barnwal and Meesho is headquartered in Bangalore. Meesho

mainly operates and presents itself as an online reselling platform that enables anyone,

customers themselves, vendors or sellers to start a business without investment. Meesho

enables small retail merchants to connect and sell their products effectively via social media

channels and it currently has 2.6 million resellers on their business platform. Over 70% of users

and customers of Meesho come from Tier 2 and Tier 3 cities and these customers can be

classified as those who are generally price conscious by nature, but in terms of quality they

want to buy quality products. Meesho has reshaped itself over the years from a platform that

was positioned as a reseller-focused platform which enabled people to sell online, has now

become into a big single ecosystem while plays the crucial role of connecting sellers to other
consumers and entrepreneurs. The startup also aspires in the long term to build an

environment where people and sellers can establish a business with no significant investment.

Meesho’s mission is to democratize internet commerce for everyone and its vision is to enable

100 million small businesses in India to move their business online and succeed on the

platform.

Meesho’s recent success has also coincided with the global pandemic as people have started

depending more on online platforms for purchasing, selling and reselling. Hence Meesho plays a

crucial role as it is very economical to establish an online reselling as product expenses,

inventory and other expenses are very minimal as Meesho is just a link between the supplier

and the buyer. Meesho operates on a B2B business model as it involves resellers, who are the

middleman between consumers and sellers and helps increase sales for business and charges

the commissions anywhere from between 5-15%. Meesho also offers businesses logistic

services and advertising on their app, which also helps them earn their revenue. They also hold

a good amount of user data of which it might sell to its partner companies, which is another

revenue stream, but not sensitive data. Meesho too has got significant backing, from funding

collected through various rounds, biggest one being an almost $600 million investment from

the Softbank Vision Fund. The Meesho Business model mostly enables women, homemakers,

and even some men to start their online business on Facebook, WhatsApp, and Instagram

without investing through Meesho.

Meesho’s strong points which help them gain so much use and traction from customers is that

of the trust and personalization in the brand. As mentioned before, the majority of Meesho’s

customers are from Tier2 and 3 cities and they do not prefer to shop online due to complicated
interfaces of other applications or fear of defective products being delivered. Hence, this model

of reselling is very assuring for them as they view a very personalized product according to their

liking. It is also very cost-effective as the prices of products on this app are lower than the big

wigs in the industry as they don’t involve big and major fixed assets or fixed costs and is an

asset-light model. Meesho also targets more resellers on its platform and aims to become a big

platform that is extensively used in Tier 1 cities. Meesho is also getting good viewership

currently as they have bought ad spaces with Star Sports during the IPL, the most watched

sporting event in India, and are also sponsoring one of IPL’s most popular franchises in Royal

Challengers Bangalore as their pant sponsor.

Now that we have seen the introductions and previews of both the companies, we now further

see that why we believe that the merger between Flipkart and Meesho should take place and

why we believe it is a win-win situation for both entities.