E-commerce related hiring is up almost 19% from last year, but Nordstrom is adding fewer seasonal workers overall.
The e-retailer’s founders say the record investment will allow the company to take a long view on developing its e-commerce ecosystem. The infusion of venture capital comes as Amazon.com Inc. is increasing its presence in India.
Indian e-retailer and marketplace operator Flipkart has raised $1 billion in a new venture capital funding round, the e-retailer’s co-founders announced today at a press conference in Bangalore, India. It is the largest venture funding round for an e-retailer in India on record.
Flipkart, which launched in 2007, sells across multiple product categories, including movies, music, games, consumer electronics, home appliances and toys, and sales have been growing rapidly. In May, when Flipkart announced an investment round of $210 million, co-founder and chief operating officer Binny Bansal said Flipkart’s gross merchandise volume was operating on a run rate of $1 billion for the year. The e-retailer says Flipkart.com gets more than four million visitors daily and has 22 million registered users.
The $1 billion investment comes from a group of new and existing investors. Tiger Global and Naspers led the funding round. Other investors include existing investors Accel Partners, Morgan Stanley Investment Management and GIC, Singapore’s sovereign wealth fund. Investors have previously put $750 million into Flipkart. The $1 billion investment is among the largest in an e-commerce company in recent years, exceeded only by $1.6 billion put into Alibaba Group Holdings Ltd. in a 2011 private equity deal and $1.5 billion put into Chinese e-retailer 360buy.com (now Jingdong Mall), also in 2011, according to data from investment bankers Petsky Prunier LLC.
“The investment allows us to take a very long-term view on the e-commerce ecosystem of India,” said Sachin Bansal, co-founder and CEO, in a televised interview with New Dehli TV Ltd, predicting that India will soon have dozens of “billion-plus” Internet companies. “India is going to have the most vibrant Internet ecosystem in the world in the future,” he said.
Any talk of Flipkart going public is now on the back burner, said Binny Bansal, because the new investment provides adequate capital. He added that some of the new investment will be earmarked for acquisitions. Flipkart acquired Indian apparel e-retailer Myntra in May.
Flipkart’s funding round comes as foreign e-retailers make investments in Indian e-commerce, which is growing quickly, albeit from a relatively small base. Forrester Research Inc. says online sales in India will grow from $2 billion in 2013 to $16 billion in 2018, increasing more than 50% a year. Amazon.com Inc.’s Indian web site, Amazon.in, launched last year, with all physical goods sold by third-party merchants at this time. (Indian law puts restrictions on investments by foreign retailers. India requires that retailers based outside the country source 30% of their products and services locally.) Amazon is the seller of record only for digital products, such as e-books and apps.
Amazon’s Seller Services arm in India yesterday announced that it will open five new fulfillment centers throughout India, raising its total to seven and bringing its total storage capacity to more than 500,000 square feet. It had only one Indian fulfillment center open in India as of April. The new centers will be in Dehli, Chennai, Jaipur, Ahmedabad and Tauru. It began offering next-day delivery to consumers in some of India’s largest cities—including Bangalore, Mumbai, New Delhi and Hyderabad—in December. Amazon is No. 1 in Internet Retailer’s Top 500 and newly released Europe 500 rankings.
Wal-Mart Stores Inc. earlier this year announced it will open 50 cash-and-carry wholesale stores in India through a subsidiary within the next five years, and that it will enable wholesale store members there to make purchases on the B2B-focused web site. Walmart.com is No. 4 in the Top 500 Guide.
“India is quickly evolving to be a fairly competitive market,” says Colin Sebastian, managing director of Internet equity research at Robert W. Baird & Co., describing Flipkart as among the largest competitors there. He says the e-commerce infrastructure is improving as a result of the “vast sums of money” flowing to e-retailers there, noting eBay Inc.’s ongoing investments in Indian e-retailer Snapdeal. EBay initially invested $50 million in Snapdeal, and in February led a round that raised more than $133 million. “Infrastructure improvements and improvements to payments, logistics and delivery—all of that is coming together to let e-commerce really flourish in the country.”
On Flipkart specifically, Sebastian sees similarities to Amazon. “Flipkart is already one of the largest e-commerce companies in India, if not the largest, and they’re emulating to some degree Amazon’s model,” he says. “That’s not a bad thing when you are establishing yourself.”