Bienvenido a India Walmart
In a knowledge economy, natural selection favors organizations that can most effectively harness and coordinate collective intellectual energy and creative capacity
The subsequent quote was given by Justin Rosenstein, co-founder of Asana, a mobile and web application designed to assist team track their work.
The decline of the traditional economy where the emphasis was more on primary factors of production like land, labor, and machinery rather than human capital has paved way for information-driven financial management called Knowledge Economy. This financial state puts more emphasis on human intellect supported by main 3 pillars that are institutional structures that offer incentives for entrepreneurship, Information and Communication Technology (ICT), and a vibrant landscape which counts private sector, civil sector and academia as its backbone.
The dawn of third industrial revolution or the so-called internet age is widely regarded as the inception of knowledge economy while the fourth industrial revolution or the era of disruptive technologies which counts Artificial Intelligence (AI), Robotics, Machine Learning, Data Analytics, and Internet of Things (IoT) etc. as its key constituents is seen as an extension of Knowledge economy in modern day era. Fintech, foodtech, healthtech, e-commerce to which Flipkart belongs etc. all are the by-products of fourth Industrial revolution.
The journey of Flipkart from an online bookselling Bengaluru suburb startup to a Singapore registered e-commerce unicorn is an example of how Human Intelligence combined with the power of ICT can develop a knowledge cum technological marvel. The brainchild of 2 IIT-Delhi alums, Flipkart on its journey to become a big billion company acquired various e-commerce powerhouses like Myntra, Jabong, e-bay India, started its own phone payments App i.e. PhonePe, and developed its own logistics arm called eKart. The growing might of Flipkart attracted international equity investors like SoftBank, Naspers, TigerGlobal, Tencent Holdings etc. which were ready to be a part of latter’s growth story.
The big billion day of Flipkart came on May 09, 2018 when World’s largest brick and mortar retailer, Walmart announced its plan of acquiring 77% stake in Flipkart. The $16 billion deal is touted as India’s biggest FDI and world’s largest e-commerce deal. This watershed deal will give Walmart the much-needed manoeuver in its fight against Amazon for global retail ascendancy in one of the world’s fastest growing retail markets. Thus, a major success story has the potential to not only change the landscape of the entire startup ecosystem in India but also the view with which investors look at India as a potential investment destination.
The lessons here are manifold for a budding entrepreneur. The first and the foremost lesson revolves around the inference that generating wealth through knowledge economy not only depends on the exploitation of ICT and Science and Technology but also on knowledge on creating capacities, capabilities, and economic value. The very new concept of marketplace model and getting everything at the click of a button resulted in creating economic value for customers. More so, the acquisition of e-commerce companies expanded customer base and latter’s supply chain coupled with the promulgation of eKart helped Flipkart in generating capabilities and capacities.
“Not just a man’s business”. ICT boom in India has given way to burgeoning of knowledge economy.
The second lesson alludes to the fact that flexibility, innovation, risk-taking, individual motivation, and new ideas are more important than stability and control. The very concept of PhonePe, bringing in new investors by diluting promoter’s stake, assuring quality to the consumer by Flipkart Assured, and the concept of Big Billion Day sale were some ideas that were in accordance with the second lesson. The third and final lesson knots the importance of an entrepreneur idea with underlying and contemporary economic and structural problem plaguing the society. As stated above, the concept of marketplace model which bought big brands and retailers on a single web platform, thereby, providing consumers a hassle-free comparison of price, quality and timely delivery of goods with just a single click created value addition in lives of the customer.
Risk taking is an essential part of entrepreneurship ecosystem.
Lastly, an add-on, the more you are near to a knowledge hub or gateway, the faster your innovation and risk-taking appetite and thus, the more are your chances of runaway success. Flipkart thrived in the silicon valley of India, Bengaluru. Presence of a large number of engineering colleges, headquarters of ISRO, home city of IISc, presence of large PSUs like HAL, BEL, BEML, good connectivity with major cities and finally an ideal weather makes Bengaluru a consummate place to nurture a company.
Concluding that Flipkart sale has given a fresh impetus to India’s burgeoning startup ecosystem that could motivate country’s budding entrepreneurs. Also, being an entrepreneur in a knowledge-driven era not only requires human capital, ICT knowledge, and big-buck investment but also requires an ever expanding and enhancing risk-taking appetite, capacity and capability building in a right atmosphere.
What are your inputs on this topic? Feel free to connect with me to discuss your views.