Published in Svenska Dagbladet, 2024-07-28. Translated from Swedish.

They have been called India’s Amazon — but the road there was long and complicated. From nothing, Sachin and Binny Bansal built the e-commerce giant Flipkart in a country of nearly 1.5 billion people, most of whom had no internet access.

Entrepreneurial stories of founders who spotted an opportunity to do better than the competition are plentiful. Rarer are those who had to build their entire market from scratch before they could even begin.

That was the situation Sachin and Binny Bansal found themselves in 2007. The two friends — sharing a surname but unrelated — worked together as software engineers at Amazon in India. The e-commerce giant had staff in the country but no consumer-facing business. The reason was clear to anyone who looked at the macro picture: while Sweden had started getting broadband a decade earlier, only five percent of India’s population had internet access at all.

The Bansals sensed an opening. Why were there no price comparison sites in the Indian market? They quit Amazon and went independent. The analysis proved shallow — they quickly realised that price was the least of the problems with Indian e-commerce. Internet coverage among potential customers was poor, and the stores selling goods were not trustworthy. Would you even receive what you ordered? Could you trust that the payment would go through?

The company had to pivot immediately. Before customers started trusting e-commerce in general, there was no point trying to compare prices. Instead they set about improving online retail itself. They borrowed two things from their former employer Amazon: the idea of selling books and an obsessive customer focus. When the first real book order came in, they had to manually search through physical bookshops to find what the customer wanted. The system was rough, but the service mentality was strong.

Over time Flipkart expanded. In 2010 it started selling mobile phones, and a new set of challenges became clear. Shipping books is relatively straightforward — a slightly bent book is still readable. Mobile phones are another matter: nothing can be broken in transit, and at significantly higher price points customers were nervous. The perceived risk of losing money loomed large. To address fears of a damaged product, Flipkart offered full returns on everything — money back, no questions asked. And to ease anxiety about paying online, an unconventional solution emerged: pay the courier in cash. It felt like a normal purchase at the point of payment, but the order still happened online.

The system was now working, and Flipkart had solved some of the toughest barriers to Indian e-commerce. Competitors noticed. Domestic rival Snapdeal made a big push, but the hardest challenge came from the Bansals’ former employer. Amazon launched in India in 2013. To compete, Flipkart had taken in significant venture capital and become the country’s second unicorn — a company valued at over a billion dollars.

The investment enabled major spending on logistics and delivery infrastructure. In a country of nearly 1.5 billion people, the complexity is easy to underestimate. But because Flipkart had arrived first, it was also forced to build systems that actually worked for its home market. That infrastructure has since generated enormous value — and made it very difficult for new entrants to challenge.

The success drew attention from around the world. In 2018, American retailer Walmart bought 77 percent of Flipkart for 16 billion dollars — one of the largest tech acquisitions ever. Walmart is one of the few companies that has managed to challenge Amazon on its home turf, and the template was familiar: Flipkart was essentially Amazon, but for India. With the acquisition, Sachin Bansal stepped down; a few months later Binny Bansal departed as well.

Flipkart is today India’s largest e-commerce player — just ahead of Amazon — with around 22,000 employees and a 48 percent market share. India has also raised internet penetration to around 40 percent, which in rough terms gives a potential market of around 600 million people. The company’s next step is rumoured to be a stock market listing, perhaps as soon as 2025.