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Flipkart and the Myth of the Indian Startup Revolution

Walmart’s decision to purchase a chunk of Flipkart last week was hailed as ‘revolutionary’ by sections of the Indian press. Economic Times, the business arm of The Sensational Times of India, went so far as to call Sachin Bansal the ‘poster boy of Indian e-commerce who redefined 21st century startups’.

In some ways, it was relief for the company that had witnessed its valuation dip by a few billion dollars last year. Amidst news of Amazon and Walmart vying for a piece of the Flipkart pie, the $16 Billion deal with Walmart must have been a sigh of relief.

As expected, the acquisition caused social to go berserk, and over-zealous patriots began pompomming the deal as a matter of pride for India; a shot in the arm for our ‘startup revolution’. At the risk of sounding like an anti-national presstitute, here is my not-so-rosy opinion on Flipkart and the Walmart deal.

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Flipkart gave me my first real experience with e-commerce. I had read about the magic of e-commerce on The Economic Times – that intimidating newspaper that I chucked the moment I started studying journalism.

To their credit, Flipkart were the first ones to fully trust Indians with a Cash on Delivery option. Earlier, sites like Rediff Shopping and Indiatimes offered COD, but you needed a Credit Card, a shopping history, and four pet tigers. And even then, the items available were limited to ‘safe’ products like baseball caps and talcum powder.

My first online order was placed in the year 2011. Ironically, as the world was moving towards smartphones, I was ordering a feature phone – Nokia X2 – the poor man’s Blackberry. This phone set new standards in over-promising and under-delivering.

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I placed my order and the phone got delivered in three days. I even got a mail saying the delivery guys tried getting in touch with me. So low were my expectations, that I was moved to tears.

Flipkart impressed

Ain’t no appreciation like genuine appreciation!

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This genuinely good impression aside, I did not become a huge fan of Flipkart in the coming years.

At its very essence, Flipkart is a rip-off of Amazon – the world’s largest e-commerce site. I find it amusing that the founders took the same path that Amazon did – books. However, Amazon did it in 1995, and Flipkart in 2007!  What’s even more shocking is that the founders are ex-employees of Amazon. Imagine you’re employed by a company, and quit to start your own clone of the same company. I’m not too familiar with business lingo, but that’s kind of a dick move.

If you look carefully, Flipkart’s business strategy is lifted from the world’s largest e-commerce site. And even it’s logo seems to be lifted from the logo of the world’s largest social media site.

In the years that followed, Flipkart and Amazon went head to head, often with similar strategies, similar logistical decisions. After Amazon did it, Flipkart launched their own music player Flyte, which took flight after a few years. Flipkart also launched their own e-book reader that had more than a few similarities to Amazon’s Kindle. The service was later transported to Kobo, and eventually shut down.

Flipkart’s few bold moves backfired badly. The decision to go app-only with Myntra was quickly aborted. Flipkart’s in-app chat service Ping was also dumped in less than a year. Nearby, the grocery-delivery add-on sank without a trace.

Flipkart’s only real innovation must have been those annoying sales. Big Billion Sale, Gazillion Sale and Poonam Dhillon Sale.

As Amazon announced its arrival to Indian shores, Flipkart did everything to prepare itself, including buying the rest of the market – eBay and Jabong, and a long, gruelling negotiation with Snapdeal.

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But then, India has never been the torchbearer of innovation. Our much-lauded IT revolution has been around for more than 20 years now. And yet, we haven’t shaken up the world with a single product, service or organisation. For the most part, we are cheaper alternative for high-end labour. An advantage that is expected to slip away from us as our brethren in Philippines and other countries wake up to the wonders of Rapidex English Speaking Course.

May be that is why we are so hung up on our past. Everybody from your friendly neighbourhood social media troll to ministers at the highest echelons of power – they love to hark back to that magical era. We love to stake claim to every modern technological thought, claiming we had done everything in the Vedic age (except sex, of course. Indians don’t have sex. They do tapasya and babies are born).

And this lack of innovation is not limited to Flipkart alone. If you search for the largest Indian startup companies, you’ll find they are all clones of global companies. Often times, the products and services are nearly identical. Ola is Uber without the professionalism. PayTM began with phone recharges and jumped on the smartphone revolution to follow the path of WeChat and other payment carriers. Swiggy does what global companies like JustEat and Takeaway do. OyoRooms is a shameless rip-off of AirBnB.

It’s perhaps telling that most of the founders of these clone companies are from IIT-IIMs – those haloed meccas of education in our country. And our media keeps worshipping these guys as visionaries and trailblazers. Whereas in reality, it is a case of first-mover in a booming economy. The strategy has been charted by others. It just needs some money and good replication skills.

I am yet to come across a single Indian startup company that is working towards a unique Indian solution to a uniquely Indian problem. (If you do, please let me know in the comments – I would love to read up on them!).

I am sure there must be organisations that are honestly trying to blaze trails. But they will never enjoy the funding or popularity that the copycats will enjoy in our culture. A culture where we go down on our knees to suck off anybody who got ‘foreign ka paisa’.

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The Flipkart deal with Walmart might be celebrated among India Inc, but please do not call them ‘change-makers’.

It makes me cringe when the founders of these companies are hailed as ‘change-makers’. They are bringing as much change to the world as Venkatapathy Raju brought to the world of fashion designing.

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19 thoughts on “Flipkart and the Myth of the Indian Startup Revolution

  1. rishi

    “OyoRooms is a shameless rip-off of AirBnB.”

    I expected the article to be well-researched as it’s not exactly a field you’re too familiar with but the above statement is wrong at multiple levels.

    Airbnb’s supply is mostly homeowners or people subletting a place, oyo’s supply base is comprised of hotels with various degrees of operational help from oyo. The target segments are also very different.

    Oyo is primarily about finding budget hotel rooms with a standardization of amenities and the listinmgs aren’t crowd-sourced, Airbnb has properties that range from rooms/hostels/apartments/villas etc and minimal standardization of service as the listings and ratings are crowd-sourced.

    I could go on about quite a few other points that are way off the mark but i think you get the drift.

    Reply
    1. Hriday Ranjan Post author

      You make a fair point. What are the other points that you thought were off the mark? Please let me know in the comments here. It would make for an interesting read. And thanks for the comment, man! 😀

      Reply
  2. Debasis Mishra

    @Radha: Your points are well taken. However, IMO most of the innovations you talked about can be thought of as taking a global product and tailoring it to the local market, which Indian companies have done better than multinationals like Amazon. AWS grew organically out of Amazon’s need to manage and run infrastructure for their own e commerce platform and became a giant in its own right. That is what innovation looks like, where you create something that fills a global need. For a more relevant picture, please look at the startup ecosystem in Israel and how many innovative products they have created. To summarize my point is we might have done well customizing products for the Indian market but we have struggled to create world beating products. The Ambassador might have been a good car perfectly suited for the Indian roads but it was a remodeled 1950s Oxford Morris. I can’t think of many products that were created in India but went on to become global big names (Toyota, Honda, Alibaba?) We have historically struggled to create good products (if you exclude the vedic times :))

    Reply
    1. Hriday Ranjan Post author

      But are you sure it’s the first of its kind? I assume there must be hoards of sites in the West that aim to simplify taxes. Not sure, just as assumption!

      Reply
    1. Hriday Ranjan Post author

      Glad you brought it up. Patanjali, in fact, I have some respect for. Even though the intentions are shaky, and the owner is shady – they had the gall to take on the world’s biggest FMCG players in the world. Their strategy was unique, whether it was the products, or the way they subverted the usual distribution model. However, at a micro level, their branding is mostly a rip-off of the largest player in that domain. In the sense that Patanjali Honey will look exactly like Dabur Honey’s packaging, and so on.

      But very interesting that you brought up Patanjali, they certainly deserve a blog of their own! Thanks 🙂

      Reply
      1. Rashmi

        Yes, Baba is nothing if not in your face! He brought yoga into our homes, you gottu give him that. Keep writing, I love your writing, with such a dearth of good content you are an original!

        Reply
  3. Radha

    There’s this problem with free speech. it doesn’t come along with the responsibility of understanding a subject before speeching about it.

    You believe that Flipkart has done nothing new, or innovative, or trailblazing. I don’t know – is making a movie like Masaan commendable? Frankly, the story isn’t groundbreaking, the technology is the same, the actors are all human. I mean, there’s nothing new under the sun, right? Does it still deserve a kudos? Yes, because creating a great experience for a given audience always does. Flipkart managed to create a great e-commerce experience in India, something Amazon didn’t dare do before 2007. They did it at a time when logistics and payments were stone-age, there was no trust, and technology driven innovation was unheard of in India.

    In fact, the technology that powers the Flipkart app is commended by tech giants like Google (who, I assume, understand tech better than we do). The reason they were able to build it? They understood before most people did that India is going to leapfrog into smart phones, and apps will be the way to talk to the country (app-only was not a waste). They also launched ‘buy new mobile, exchange old one’ – something that Amazon copied eventually – they did that because they understand how the Indian mother’s mind works. They recently launched this payment option called ‘EMI on debit card’ – I am sure Amazon will launch it soon.

    ‘If you look carefully, Flipkart’s business strategy is lifted from the world’s largest e-commerce site.’ Pray, tell me, what is Amazon’s business strategy? I read their yearly filings, their cash cow is their AWS. Flipkart started with books not because they couldn’t think any better – but because it’s one of the easiest category to start e-commerce with. Since then, their strategy has been quite different. Sales and flash sales are actually a part of it.

    There’s a lot more I would like to say, where do I start?
    ‘Nearby, the grocery-delivery add-on sank without a trace.’ Flipkart learnt from it, perhaps, because they restarted grocery last year.
    ‘Flipkart also launched their own e-book reader that had more than a few similarities to Amazon’s Kindle.’ Fact check, please.

    Exit Flipkart, lets talk about the startups industry.
    ‘If you search for the largest Indian startup companies, you’ll find they are all clones of global companies.’ Because when Indian techies try to innovate for India, nobody funds them. Case in point, Tatas, Birlas, Ambanis didn’t invest in Flipkart, or any start-up – their response was to start their own businesses.

    ‘It’s perhaps telling that most of the founders of these clone companies are from IIT-IIMs – those haloed meccas of education in our country.’ Theirs are the companies that get the most money and become big. Even without the hated IITs, the companies will look the same.

    ‘OyoRooms is a shameless rip-off of AirBnB’ No, it’s not.

    ‘I am sure there must be organisations that are honestly trying to blaze trails. But they will never enjoy the funding or popularity that the copycats will enjoy in our culture. A culture where we go down on our knees to suck off anybody who got ‘foreign ka paisa’.’ Yeah, there’s no desi paisa. See anyone desi who believes in innovation, or something bold? Why, you just need to read your own blog, and you will see how well this country celebrates local achievements.

    ‘It makes me cringe when the founders of these companies are hailed as ‘change-makers’ Strange, the kind of things that make you cringe. Too bad that they created a successful company which will inspire other people to do the same.

    ‘I am yet to come across a single Indian startup company that is working towards a unique Indian solution to a uniquely Indian problem.’ Since you asked, check out Rupeek. It’s no leap of imagination, but gold loans is as Indian as it gets. (I got them their first funding, so I do know a thing or two about startups).

    ‘And yet, we haven’t shaken up the world with a single product, service or organisation.’ Wow, am I surprised?

    Reply
    1. Hriday Ranjan Post author

      🙂 Thanks. Interesting comment, I am not going to fight your opinion. I’ll check out Rupeek!

      Reply
  4. Jay Krishnamoorthy

    What do you think about Bankbazaar? I have not seen such an use case in North America (which seems to be the source of business model for the other Indian startups you have mentioned in your article)!!

    – Jay

    Reply
    1. Hriday Ranjan Post author

      I have come across it. Isn’t it like PolicyBazaar, which compares policies across companies?

      Reply
      1. Jay Krishnamoorthy

        Yes, but just thought these are solutions originated in India, not copied from other nations’s products.

        Reply
  5. kshitij

    “unique Indian solution to a uniquely Indian problem.” reminds me of kan khajura tesan by HUL!

    Reply
  6. Amarjeet

    This is the first contrarian article I’ve come across. Happy to read something different.
    I wouldn’t be so harsh though. Imitation is the best form of flattery, and business models aren’t patented, so it’s not a crime. One of our strengths as an Indians is “executing”. So we’ll be playing them.
    and yeah, hailing them as “changemakers” is a bit too much Let’s just call them people who are very rich now! And that’s what everyone looks up to.

    Reply

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