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CEO: Will Exceed Rev Target Of Rs 600 Cr This Yr

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Bangalore-based e-commerce startup Flipkart is speculated to be raising a $150 million from private equity investor General Atlantic Partners. The four-year-old company has so far raised $31 million from Accel Partners and Tiger Global. Flipkart's co-founder and CEO Sachin Bansal elaborated on the company's growth plans for the current year in an email interview with Businessworld's Snigdha Sengupta.

Excerpts:

Are you in the market to raise a fresh round of funding? How much and why?
We are not commenting on speculation regarding any future rounds of funding.

As of March 2010, as per Registrar of Companies (RoC) filings, Flipkart had revenues of Rs 11.6 crore. What were the company's revenues as on March 31, 2011?
The cumulative revenue for 2010-2011 under RoC will be in the region of Rs 50 crores. However, we have exited the year at the running rate of Rs 80 crores for the last quarter of 2010-2011.

What are the company's growth targets for the current financial year, both in terms of revenues and profits? Did the company report profits as on March 31, 2011?
We will comfortably exceed the revenue target of 600 crores that we had set for this year; currently we are clocking sales of more than 1 crore per day. Flipkart became profitable within six months of launch and at a per transaction level, we are still profitable.
However, at an operational level we are investing aggressively in scaling up all aspects of our business (technology, supply chain/logistics, customer support & marketing) to cater to a much larger customer base. These investments will keep us in the red for some time to come. We plan to continue investing for growth till we continue seeing a 100 per cent growth year on year.

How many book titles does the company offer on the site at present? How will this grow in the current fiscal?
Currently, we offer over 10 million book titles on our website. We are already the largest importers of books into India and are among the largest buyers from several leading publishers in the country. We are also actively pursuing tying up with international suppliers in order to make more and more international titles and editions available to our customers.

What percentage of your revenues come only from books?
While books remains the largest category and Flipkart the biggest online retailer of books in the country by far, it now contributes less than 50 per cent to our revenues. The new categories we have introduced over the past few months are seeing remarkable growth both in terms of customer base and revenue generated.

What percentage of your transactions are cash-on-delivery?
Almost 60 per cent of our transactions today are cash on delivery.

What percentage of the book titles that you offer are discounted? What is the average discount? How are you able to protect margins with a sustained discount policy?
We offer discounts on almost all the titles that we offer. The average discount is around 25 per cent on the cover price. The online business model (with low overheads and larger volumes) means higher cost savings, which we pass on to customers in the form of discounts.

Amazon.com is set to make an India entry. How do you propose to counter the competition from such as large and dominant player?
E-commerce in India is at a very nascent stage. The categories are evolving fast and this growth will only escalate with the entrance of serious players. We do not view this as a development impacting Flipkart's plans to a great extent. We have met all the benchmarks that we had set for ourselves and will continue to do so in the near future.


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