Success stories in business often feel like modern-day fairy tales, full of surprising breakthroughs and incredible growth. Among them is one standout tale—a lesser-known firm that achieved a remarkable 50-fold revenue increase just two years after joining Flipkart as a seller.
This is the story of the Secunderabad-based Manasanipally family, the driving force behind SV Electronics Private Ltd (SVEPL). This family-run business, specializing in selling electronics like laptops and audio devices, saw its revenue skyrocket after listing its products on Flipkart. In just two years, its turnover went through the roof, marking an extraordinary journey of growth and transformation.
Curious about how they pulled it off? Let’s break it down step by step to uncover the secrets behind this phenomenal success. Source: Economic Times
SV Electronics Financial Performance in FY23 & FY24
By the end of FY23, SVEPL reported a 108% jump in revenue, with a turnover of Rs.85.49 crore. The company’s profit after tax (PAT) also increased, rising from Rs.17.7 lakh to Rs. 20.39 lakh. In their annual report, the directors expressed optimism about the company’s future, expecting even better performance in the coming year.
SVEPL’s performance in FY24 exceeded all expectations. The company achieved a staggering turnover of Rs.1969.71 crore, marking an unprecedented 2,200% increase in revenue compared to the previous year. In their recent annual report, the directors attributed this dramatic growth to the boom in e-commerce during the period.
The company recorded a total gross revenue of INR 1969.71 crore during the year, as against INR 85.63 crore in the previous year, recording a sharp rise of over 2,200% in total revenues due to a surge in the e-commerce business. Source: Economic Times
The Profit After Tax did not experience a proportional increase, rising by less than four times to Rs.77.85 lakh despite revenue soaring 22 times. This was despite a massive 50x surge in turnover—from Rs.40 crore to nearly Rs. 2,000 crore in under two years.
The Flipkart Deal and a Remarkable 50x Growth
According to the Walmart-owned e-commerce giant, Flipkart has over 300,000 registered sellers in India. Many work tirelessly to scale their businesses while competing with numerous lesser-known rivals.
To capitalize on the growing e-commerce wave, SV Electronics Private Ltd (SVEPL) strategically partnered with Flipkart, setting up a dedicated online division. According to the company’s FY23 annual report, SVEPL entered into agreements for wholesale supply with the group’s wholesale arm and a services agreement with Flipkart Internet, which manages the marketplace platform. Similar arrangements were also established with Myntra Designs and Myntra Jebong, further expanding the company’s reach. Source: Economic Times
Why Flipkart? The Power of E-Commerce
Flipkart, one of India’s largest e-commerce giants, provided the perfect launchpad for small and medium enterprises (SMEs). Its robust logistics network, massive customer base, and user-friendly seller interface allowed smaller players to compete with established brands on an even footing.
For this firm, listing on Flipkart meant access to millions of potential customers—something impossible through brick-and-mortar stores. The platform also offered valuable insights into customer preferences, enabling the company to tweak its products to match market demand.
The Early Days of SV Electronics
SV Electronics, founded as a public company in the late 1990s, was initially managed by its Managing Director, M. Venkateswara Rao, along with a few external partners. At the time, the company operated physical stores in the Secunderabad area, specializing in selling electronic goods.
Over time, ownership consolidated within Rao’s family. Almost all shares were held by Rao, his wife, brothers, and nephews, making it a closely-knit family business. The shift to e-commerce and strategic partnerships later transformed this modest venture into a remarkable success story.
Holding Pattern of SV Electronics
| Stakeholder’s Name | Stake (%) |
| Venkteswararao Manasanipally | 34.81 |
| Manusanipally Varadaraju | 17.74 |
| Manasanipally Roopa | 17.40 |
| Nagaraju Manasanipally | 12.23 |
| Manusanipally Ravikanth | 9.50 |
| Manasanipally Amarnath | 3.40 |
| Manusanipally Krishna Moorthy | 3.02 |
| Thotaiah Manasanipally | 0.95 |
| Narasimha Rao Manusanipalli | 0.95 |
Product Portfolio and Sales Dynamics of SV Electronics
- Most of SVEPL’s sales were generated from high-value items such as laptops, audio devices, and wearables.
- Popular brands among SVEPL’s bestsellers included Acer, Asus, Lenovo, and HP.
- SVEPL did not need to establish physical locations in each state to comply with GST requirements.
- There didn’t have to increase the number of staff within the finance department to handle the growing number of transactions.
- Flipkart’s ecosystem managed all operational and compliance tasks centrally.
- SVEPL outsourced key operations to leading firms to streamline its processes. Deloitte Touche Tohmatsu India Limited assisted with GST registrations across various locations, filed periodic and annual GST returns, conducted GST-related reconciliations, and offered advisory services to the online business division.
- KPMG Assurance and Consulting Services LLP was contracted to provide end-to-end services for setting up books of accounts and treasury, overseeing ongoing bookkeeping, supporting periodic book closures, and coordinating audits for the online business division.
Flipkart’s Two-Tier Structure and Its Impact
In 2021, ET Prime highlighted a detailed account of thirty firms authorized by Flipkart to act as distributors and diamond sellers. This two-tier structure, developed with the assistance of Big Four consultants, allowed Walmart’s arm to both own and sell stock, potentially bypassing restrictions imposed by FDI norms.
Under Indian FDI policy, foreign investment is prohibited in multi-brand retail, but there are no such restrictions in wholesale or marketplace businesses. This gap necessitated a network of third-party firms that could be controlled operationally, ensuring the smooth functioning of Flipkart’s e-commerce business.
Preferred Sellers and Annual Fee
Unlike individual sellers who have gradually built their businesses on Flipkart, companies like SVEPL maintain a deeper and more strategic engagement with the e-commerce giant. A key indicator of this relationship is that SVEPL’s entire online business was developed without significant capital increases. As of March 2024, the company’s share capital remained at Rs.2.65 crore, while its long-term borrowings were Rs. 61 lakh.
Preferred Sellers: A Special Category
These firms are termed “preferred sellers” in regulatory terms and essentially lend their names for a fee. According to industry sources, SVEPL earns around Rs.2 crore annually from this arrangement. Through service providers, Flipkart handles all aspects, including stock management, goods movement, bookkeeping, and GST compliance. The seller’s primary concern is managing its monthly cash flow, approximately Rs.16-17 lakh.
Only a few companies have joined this exclusive network, with SVEPL being one of the select few. Unlike regular sellers, who pay substantial fees to the marketplace, these special sellers enjoy a different arrangement.
How SVEPL Gained Access to the Network
So, how did SVEPL become one of the lucky few chosen for this inner circle of Flipkart’s selling network? Insiders suggest that SVEPL’s success in joining the exclusive network was partly due to the company’s connection to a former Flipkart executive. Rao, the managing director of SVEPL, was reportedly close to Santosh Kumar B, a former senior executive in Flipkart’s finance department. Kumar, a chartered accountant, is believed to have played a pivotal role in creating the two-tier structure to navigate complex retail and FDI policies. Based on his recommendation and internal advocacy, SVEPL was selected for listing.
Conclusion
SV Electronics’ transformation from a family-run business to a powerhouse in e-commerce showcases the immense potential of strategic partnerships, particularly with platforms like Flipkart. Their 50x revenue growth in just two years highlights how leveraging e-commerce, smart outsourcing, and a favorable network can propel a small business to extraordinary success.
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FAQs
How did SV Electronics achieve 50x revenue growth in just 2 years?
Strategic partnerships, particularly with Flipkart, drove SV Electronics’ growth. The company gained access to a vast customer base, robust logistics, and data-driven insights by listing on Flipkart. This allowed them to scale rapidly, enhance product offerings, and streamline operations, leading to an unprecedented revenue surge.
What role did Flipkart play in SV Electronics’ success?
Flipkart provided SV Electronics with a robust platform with extensive reach and operational support. Through its marketplace, Flipkart facilitated seamless product listing, logistics, and compliance management, allowing SV Electronics to focus on growth. At the same time, the e-commerce giant managed key business processes like GST and bookkeeping.
How did SV Electronics manage operational costs with such rapid growth?
SV Electronics managed operational costs by outsourcing key functions like GST registration, bookkeeping, and audit services to firms like Deloitte and KPMG. Flipkart’s ecosystem helped streamline processes, reducing the need for significant capital investments in infrastructure or staff, which helped maintain profitability despite the rapid revenue increase.
What makes SV Electronics a preferred seller on Flipkart?
SV Electronics is considered a “preferred seller” due to its deep engagement with Flipkart, allowing it to benefit from special terms. These include a streamlined business model where Flipkart handles stock management, logistics, and compliance, enabling SV Electronics to focus on its core business while enjoying a steady cash flow and minimal overhead.
I’m Archana R. Chettiar, an experienced content creator with
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