"Logistics: On the logistics side, Amazon India had launched a pilot program to test in-store pick-up service in Delhi and Mumbai in association with BPCL’s In & Out stores. Shoppers were provided the option to select In & Out as the pick-up of point of their Amazon purchases during the checkout process.
This pilot was later extended to Bangalore in the following month, wherein it allowed customers to pick-up their Amazon purchases from local kirana shops."
> Unlike USA, India has not yet figured out how to build proper usable roads,
> the cities are not planned and India does not have a proper addressing
> system. Government regulations have further made life difficult for courier
> companies. All this has resulted into cities and towns where traveling over
> few kms is very expensive and time consuming as a result small shops
> catering to need of local communities have sprung up like mushrooms.
That is the reason why you are not an investor.
Regarding non-standard addressing systems, etc. Anecdote: in my experience, courier systems are a little different in India than it is in the US. As I remember from my time there (lived there till 2007), the courier system is de-centralized. Local companies with a reasonably good knowledge of the neighborhood, etc. do the 'last-mile' delivery. The rest is usually managed by nationwide companies, including DHL, etc.
[1] C. K. Prahalad, R. A. Mashelkar, "Innovation's Holy Grail," Harvard Business Review, Jul 2010. http://repository.ias.ac.in/63026/1/25_aut.pdf
However the question I raised was whether Flipkart has come up with a financially profitable and scalable innovation. They might have; because clearly I do not have access to the kind of information that the investors must have had but looking at the public domain it appears that flipkart does not have that innovation. Their CEO is also admitting it in public:
"We have 22 million registered users, and almost similar number of customers. The way we look at it, when this figure reaches 100 million, we'll be in a position to think of profitability. When we have delivered products to one in three homes in India, we'll get to that point." - S Bansal
You are right, India is a small market right now, but if they can build a low-cost model armed with a global supply chain, they can compete with Amazon in other markets too.
Here is a great article about him : http://www.forbes.com/2008/02/22/mitra-zoho-india-tech-inter...
Flipkart has managed to scale its revenue but without making a profit. Even this would have appeared as a good opportunity if Flipkart was kind of de-facto e-commerce business in India. Turns out that it is not. Snapdeal, Junglee (Amazon India) are pretty close. Myntra was the leader in apparel and fashion products sale online which was then acquired by Flipkart. (Myntra was not profitable either).
I find it hard to understand why anyone believes that Flipkart would ever make profit in next 5 years or so. I find it hard to believe.
Unlike USA, India has not yet figured out how to build proper usable roads, the cities are not planned and India does not have a proper addressing system. Government regulations have further made life difficult for courier companies. All this has resulted into cities and towns where traveling over few kms is very expensive and time consuming as a result small shops catering to need of local communities have sprung up like mushrooms. Current India is probably resembles more to the A&P days of USA.
My assertion is validated by the fact that Travel Booking and Movie ticket booking websites in India are growing fast and also very profitable.