In 2014 they came up with a concept of Big Billion day, which included an exclusive relationship with Motorola which released Motorola G and Motorola E,which was exclusively popular in India at that time. Flipkart was the only app which had tied up with these. They did a 100 million dollars on that day. It was actually a disaster, as they didn't expect that many responses from consumers.
Sachin Bansal and Binny Bansal were actually working for Amazon. Since they had a dream of starting their own, they came out of Amazon and started their own app called Flipkart. This was in the period of 2007- 2008.
They started with operating an online book reseller as they came from Amazon. They had of about 100 orders a day in that 2008 frame. As they moved forward for ages, they began to get progressive year by year. They were able to tie up with many other companies and other products gradually.
After all the growth and success and the loss and investments, here comes the topic of Debt. Flipkart had raised about 150 million dollars of debt in the bank of India. Let us have brief information about Walmart. Walmart is a foreign company and was not allowed to sell their products to the consumers of India directly. they were allowed to sell it to only retailers as the Indian law did not agree for the direct contact with the consumers.
The Flipkart had two deals in their hands.
The amazon, bid 22 billion dollars to take up the ownership of Flipkart. Where in sachin was favorable to this deal. Sachin had an issue to be a chairman and wanted a bigger position. Sachin and the soft bank investors were favorable to this deal and also sachin had a thought that he could again get back to the higher position in the company. But then, the board member lee, did not agree for this deal and he did not want Sachin to come back into the higher position of Flipkart head. So, he deliberately said no to this deal, because on the other hand, lee had a plan of making Binny as the head.
On the other hand, they had this deal from Walmart. Where they bid for 16 billion dollars. Lee was actually convinced with this offer and agreed to give ownership for Walmart. At that time Walmart had 6 billion dollars on their balance sheet in cash. They were yet to pay 16. They were in debt. Walmart had least 10 billion dollars debt in acquisition with Flipkart. They were actually provided with 4 years IPO time. They expected increase in the growth and gain profits and thought that they could clear all the losses and debts. There are other companies which are interlinked to this process like Google and Ebay.
Google was not likely interested in amazon coming up. They were interested in Walmart coming up in India. Since, Flipkart is going to be tied up with Walmart, google were in good terms with the Flipkart too.
Ebay was also a part of this. Perhaps Flipkart licensed the Ebay name and were using it as Ebay India. But something happened in between or some internal clashes or dramas made Walmart to pay Ebay some billion dollars to cancel the license of Flipkart. Ebay actually cancelled the license provided to the Flipkart and asked them to relaunch it again. Finally, the deal was done and was waiting for the regulatory approval and the Walmart is going to Own the Flipkart.
Few people thought that it’s an expensive acquisition of Flipkart and its going to take a quite bit long time to clear the debts. But also, few say that it’s a long-term thing for the Walmart. If the Flipkart had paid 300 million dollars more for the Snapdeal and owned it, maybe things would have worked in a different way. That would have been a trouble for Walmart to get into the Indian Market, since Flipkart would have been the major market share holder in India. if they bring all of their efficiencies to the table, they would make a tremendous profit in India.