Flipkart to move data centres in-house

NEW DELHI: Flipkart has started moving its data centres inhouse to build its own network of India's largest server farms, that may be opened up in future for use by other online companies, potentially moving towards a model pioneered by rival Amazon in the global markets.

Valued at about $15 billion, India's largest online retailer has built data centres across various metro cities such as Chennai, Hyderabad and Bengaluru. The data centres now house details of over 50 million Flipkart users, their payment methods, details of sellers and listings across platforms.

"Every quarter, we do a Big App sale day and it's bigger than the Big Billion day of last year. We have not faced any issues in scalability and it's only (become) better," said Punit Soni, Flipkart's chief product officer. "We are India's largest internet company and the world looks up to us," he added. The data centres were built from scratch by the company's engineers.

"Over time yes who knows we may think of opening it up (to third parties). But only once we have achieved stability inside," said Soni. Flipkart was working with outsourced data centre services providers, such as NetMagic, till now.

If set up as a third party arm, a Flipkart cloud platform has the potential to open a new and highly profitable revenue stream for the company which has said that it expects to sell merchandise worth $8 billion this fiscal.

Amazon which opened AWS in 2006, as a separate cloud platform, earns over $6 billion a year from it. In India, AWS has had clients such as redBus, FreshDesk, Paytm and Capillary Technologies in the startup space.

Flipkart also said that letting the data come in-house also offers more security. "All the data is secure as it is anchored in our servers," said Akshay Rajwade, director of mobile products at Flipkart. "It also offers us an opportunity to test out more innovation on the mobile," he said.

The cloud services market in India is expected to reach $1.9 billion by 2018, as per Gartner estimates. In India, the data centre market is estimated at about $900 million with companies such as CtrlS, NetMagic, Reliance, NTT Communications, Ricoh, Sify and ESDS dominating the space. US tech majors such as Amazon and Microsoft have also announced that they will launch data centres in India by next year.

Snapdeal on course to topple Flipkart from top, says CEO Kunal Bahl

NEW DELHI: Less than two weeks after raising $500 million, Snapdeal Chief Executive Kunal Bahl has thrown down the gauntlet to Flipkart, asserting that his company is on course to topple the Bengaluru firm as the country's largest electronic marketplace.

The Snapdeal cofounder said the company achieved $4 billion (about Rs 26,000 crore) in total value of goods sold, or gross merchandise value, this month, about a year after it crossed $1 billion in GMV.

"The one thing I am very, very clear about right now is that I think we're going to be No. 1 (in terms of sales) by March 2016," Bahl said in an exclusive interview with ET. "I think we're going to beat Flipkart by then."

Snapdeal is India's largest marketplace in terms of merchants, with about 2 lakh sellers on its platform, while Flipkart has the biggest market share and is the country's most valuable ecommerce company.

Snapdeal's challenge to Flipkart is emblematic of the battle for dominance in India's ecommerce market, fuelled by record capital infusion this year that Internet companies are using to expand and acquire firms in uncharted areas that will bolster sales. While India's top ecommerce firms have been locked in an attritional battle for pole position the past three years, this is the first time one of the big guns has unveiled an outright challenge to its rivals.

Flipkart in June adjusted its GMV target to $10-12 billion in 9 months to a year, a slight bumpup from its earlier forecast of $8 billion for the year to March 2016 and more than double the $4 billion it achieved in 2014-15. It recently closed a funding round of $700 million from existing investors — New Yorkbased hedge fund Tiger Global andSteadview Capital.

Amazon has announced plans to invest $5 billion in India to turn the country into its biggest market outside the US.

Flipkart spokespersons declined to comment for this article.

"It took us two-and-a-half years to reach GMV of $1 billion, a milestone that we reached on July 31 last year. This month we've crossed $4 billion. It took us only a year to go from $1 billion to $4 billion. We hit $3 billion about three-odd months back. The acceleration has been very significant," said Bahl, 32, asserting that in about six months Snapdeal will be "decisively ahead" of Flipkart in terms of GMV.

Snapdeal Got $500 million Funding

Bahl's assertion comes barely weeks after Snapdeal closed a $500-million funding round led by Taiwan's Foxconn, China's Alibaba Group and existing backer Japan's SoftBank.

The entry of two strategic investors is expected to give a massive boost to Snapdeal in its bid to emerge as the country's largest ecommerce firm, given that both Foxconn and Alibaba are seen as long-term investors, unlike private equity and hedge funds that have shorter redemption windows.

Flipkart currently commands 44% market share of India's ecommerce market, followed by Snapdeal at 32%, according to a recent report by Morgan Stanley. Amazon's India unit accounts for 15% of the online retail pie.

In a separate report, Goldman Sachs estimated that India's online retail industry would grow at 47% compounded annual growth rate to $47 billion over the next five years.

Bahl declined to give a projection of Snapdeal's total sales for this fiscal year, but credited the company's recent $400-million acquisition of payments platform FreeCharge and its undisclosed investment in logistics venture GoJavas as being prime drivers of growth. Snapdeal's investments have been part of its ambitious strategy to build a comprehensive ecommerce ecosystem offering everything from products to financial services and having the infrastructure to meet demand — crucial especially as the festive season kicks off, providing a major battleground for online retailers. "This Diwali our plans are mega," said Bahl.

Flipkart, Snapdeal may check your identity before shipping goods

MUMBAI: Online retailers Flipkart and Snapdeal are working with companies that can help them ascertain the details of consumers before shipping goods to them.

This comes after the e-commerce companies suffered losses of crores of rupees from false mailing addresses and turned away goods, something that the banks learnt the hard way after getting singed for decades. "We identify the name and address throgh mobile number and credit card information," said Chirag Bakshi, chief executive of Zumigo, a startup backed by Wells Fargo and Intel Capital. "This is enabling security and identity." In online transactions, the liability rest with the merchants. Zumigo is in talks with merchants and bureaus in India to help them identify a customer and check fraud.

In the United States, it has tied up with Equifax and other credit bureaus. Data is not stored with any mobile wallet or merchant. "We are using identity to facilitate fast payment for sale. You can use it to make payment at any browser site," said Bakshi. To validate an account, it may ask simple questions such as pin code or CVV.

The tie-up with telecom companies will help identify whether the person is at the location before delivering cash on delivery. If cash on delivery is refused, it is a liability for online marketplaces. Though Zumigo may get information from telecom companies and help reduce delivery cost for online marketplaces, it may find it difficult to tie up with credit bureaus in India.

"We are regulated under Credit Information Companies Regulation Act (CIRCA), which does not allow us to share information with anybody other than specified user," said Mohan Jayaraman, managing director of Experian Credit Information Company of India.

CIRCA clearly defines a specified user who can register with a credit bureau as member entity. Other than credit institutions, insurance companies, telephone services providers, credit rating agencies registered with Securities and Exchange Board of India (Sebi), a stockbroker or sub-broker registered with Sebi, a trading member of recognised commodity exchange, Sebi and Insurance Regulatory and Development Authority are regarded as specified users.

Ratan Tata, the 'angel' investor

Ratan Tata puts the word angel in "angel investor". In the last one year, when he first made an investment in Altaoeros Energies, Tata has been on an investing spree. And his choice of firms of firms has revolved around start-ups and e-commerce portals. 

When he retired in 2012, Ratan Tata had let it be known that he wanted to reach out to people and have them draw from the trusts' expertise to give a strong push to new businesses. Since then, Tata has been actively working on those words.  

Here's a list of all the start-ups and e-commerce companies that Ratan Tata has invested in: 

September 2, 2015 Holachef

Chairman emeritus of Tata Sons Ratan Tata has made a personal investment of an undisclosed amount in the online marketplace for chefs Holachef.

Launched in September 2014 by Saurabh Saxena and Anil Gelra, Holachef has seen substantial growth in Mumbai and Pune, the company said in a statement.

July 3, 2015 Internet Saathi

On the heels of Narendra Modi's Digital India announcement, Tata Trust tied up with Google and Intel and kicked off the Net Initiative for women, which will strive and bring the internet to more and more women in rural India. 

Under the 'Internet Saathi' program, 1,000 bicycles with internet connectivity devices will cover 4,500 villages in the next 18 months, starting with Gujarat, Rajasthan and Jharkhand with a target of reaching 500,000 women. These cycles will give the villagers an internet experience, Tata said. 

July 1, 2015 - Ola

Bhavish Aggarwal, Ola Cabs' CEO made the announcement on Twitter. He said that his company “can now learn from the rich experience of one of the finest business leaders of our times”, in a blogpost on the Ola Cabs website. 

Founded in 2011, Ola Cabs now operates in over 100 cities with over 200,000 drivers.

July 2015 – Jungle Ventures

Jungle Venture is a Singapore based venture capital company that focuses on technology-based companies in the Asia-Pacific region. Tata has joined the company's board as a special advisor, and will mentor the company's in the venture capital firm's portfolio. The company has already invested in 30-odd technology-based start-ups like Zipdial, CrayonData and LiveSpace.

June 2015 – Fashion portal Kaaryah 

Nidhi Agarwal Kashyap now boasts of Ratan Tata as an investor in her online fashion portal that deals with non-casual wear for women. She literally got Tata's attention via an email. 

April 26, 2015 – Xiaomi

China's largest smartphone maker, Xiaomi got its first Indian investor in the form of Ratan Tata. The company's CEO Lei Jun plans to make India an important market for the phone too, after China. 

March 2015 – Grameen Capital

Grameen Capital is an investment advisory company ranging from spaces from microfinance to education and healthcare. They list their aim as catalyzing inclusive growth and make capital market access possible for enterprises that may have a positive impact on the society -- including, microfinance institutions, healthcare providers, low-cost education firms, and so on. 

March 13, 2015 – One97 Communications 

One97 Communications is the company that operates Paytm, an online payment solution company. Headquartered in Noida, the company also offers the option of an online wallet to its users now. The company's website said that they now have over 80 million registered users, and handles over 60 million orders per month. 

February 8, 2015 – cardekho.com

Started by two IIT-Delhi graduates, Anuraj and Amit Jain, and cardekho let's users buy, sell and compare prices of various cars in the market. It also reviews cars. The same duo also run bikedekho.com.

December 2014 - Swasth India

Swasth India is a start-up that provides healthcare services to the lower income population of the society. The company was set up by and IIT Bombay graduates Sundeep Kapila and Ankur Pegu.

November 15, 2014 – Urban Ladder 

Leading furniture and home decor e-portal was started by IIM-Bangalore graduates Ashish Goel and Rajiv Srivatsa in July 2012. It soon sprang to popularity and is now one of the most wel-known online portals for furniture. 

September 11, 2014 – Bluestone

An online jewellery portal, Bluestone was founded by Gaurav Singh Kushwaha, an IIT graduate. He is also the CEO of the company. Bluestone is also backed by Kalaari Capital. 

August 27, 2014 Snapdeal 

Ratan Tata's invested an undisclosed amount into India's e-commerce website Snapdeal.com that is backed by Kalaari Capital. The portal also has Wipro's Azim Premji as an investor. 

Early 2014 – Altaeros Energies

Boston-based company was set up to commercialise the world's first air-borne wind turbine. In late 2014, the company also raised $7 million from Softbank.

Snapdeal acquires Silicon Valley startup Reduce Data

Snapdeal has acquired Reduce Data, a Silicon Valley startup, for an undisclosed amount to strengthen its discovery platform as the e-commerce major competes head-on with giants like Flipkart and Amazon.

The Mountain View-based company has a programmatic display advertising platform that leverages artificial intelligence, real-time data and other tools.

Founded in 2012 by Asif Ali, the company has customers across the US, India and the UK.

"With this acquisition, the Reduce Data team will join Snapdeal and drive the roadmap to build a world class discovery platform and associated tools for brands as well as over two lakh sellers on the marketplace," Snapdeal said in a statement.

Company's co-founder Rohit Bansal said Ali comes with 17 years of experience in building web scale technologies, product management and building highly specialised teams focused on a data platform and ad tech products.

"We are confident that Asif and his team will further strengthen our technological capabilities," he added.

Snapdeal has been on an acquisition spree, beefing up its presence as it takes on players like Flipkart and Amazon in the burgeoning Indian e-commerce industry.

This year alone, Snapdeal acquired payments and mobile recharge startup Freecharge in a cash-and-stock deal (estimated at USD 400-450 million), MartMobi and Letsgomo Labs as well as picked up stakes in digital financial services platform RupeePower and logistics venture GoJavas.

Founded in 2010, Snapdeal has over 40 million registered users and over two lakh business sellers.

Snapdeal, which counts Japan's SoftBank, Foxconn, Alibaba and eBay among its investors, has been scouting for acquisitions in mobile technology and supply chain space.