Flipkart Sale: Being An Entrepreneur In The Era Of Knowledge Economy

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 quote above was given by Justin Rosenstein, co-founder of Asana, a mobile and web application designed to assist the team in tracking 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 the way for information-driven financial management called Knowledge Economy.

This economic state emphasizes human intellect supported by the main three pillars: 

• Institutional structures that offer incentives for entrepreneurship
• Information and Communication Technology (ICT)
• A vibrant landscape that counts the private sector, civil sector, and academia as its backbone. 

The dawn of the third industrial revolution or the so-called internet age is widely regarded as the inception of the knowledge economy. 

The fourth industrial revolution, which counts Artificial Intelligence (AI), Robotics, Machine Learning, Data Analytics, the Internet of Things (IoT), etc., as its fundamental constituents, is seen as an extension of the knowledge economy in the modern-day era. Fintech, food tech, health tech, e-commerce, to which Flipkart belongs, are all the by-products of the 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, became a big billion company and acquired various e-commerce powerhouses like Myntra, Jabong, e-bay India, started its phone payments App (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 the latter’s growth story. 

The big billion days of Flipkart came on May 09, 2018, when the world’s most giant brick and mortar retailer, Walmart announced its plan of acquiring a 77% stake in Flipkart. 

The $16 billion deal has been touted as India’s most significant FDI and the 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 significant success story can change the landscape of the entire startup ecosystem in India and the view with which investors look at India as a potential investment destination. 

The lessons here are manifold for a budding entrepreneur:

• The first lesson revolves around the inference that generating wealth through a knowledge economy depends on exploiting ICT and Science and Technology and on knowledge on creating capacities, capabilities, and economic value. 
• 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 idea of Big Billion Day sale were some ideas per the second lesson. 

• The third and final lesson knots the importance of an entrepreneur idea with underlying and contemporary economic and structural problems plaguing society. 

The needs acquisition of e-commerce companies expanded the customer base, and the latter’s supply chain coupled with the promulgation of eKart helped Flipkart generate capabilities and capacities.

“Not just a man’s business” The ICT boom in India has given way to the burgeoning knowledge economy. 

As stated above, the concept of the 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 to the lives of the customer.

Risk-taking is an essential part of the entrepreneurship ecosystem.

Lastly, an add-on, the more you are near 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. 

The presence of many engineering colleges, headquarters of ISRO, the home city of IISc, the presence of large PSUs like HAL, BEL, BEML, good connectivity with major cities, and ideal weather makes Bengaluru a consummate place to nurture a company. Concluding it all, the Flipkart sale has given a fresh impetus to India’s burgeoning startup ecosystem that could motivate the country’s budding entrepreneurs.

Also, being an entrepreneur in a knowledge-driven era requires human capital, ICT knowledge, and big-buck investment and needs an ever-expanding and enhancing risk-taking appetite, capacity, and capability building in the right atmosphere. 

What are your inputs on this topic? Feel free to connect with me to discuss your views.