Flipkart founders: When we have 100 million customers, we will become profitable

Written by fe Bureau | Bangalore | Updated: Jul 30 2014, 16:40pm hrs
Flipkart-BansalsFlipkart founders Sachin and Binny Bansal at a press conference in Bangalore. (PTI)
Flipkart is on a high, having raised $1 billion from a group of investors, led by Tiger Global and Naspers, a deal that is likely to take the online marketplaces valuation to around $5 billion. In an interaction with mediapersons, Flipkart co-founders Sachin Bansal and Binny Bansal talk about why profitability is not yet on the agenda for the seven-year-old firm and that empowering sellers and enhancing customer experience is a bigger priority over worrying about competition.

Is profitability still not an agenda

Sachin Bansal: We have 22 million registered users today. The way we look at it, once we have 100 million customers, that day we will get profitable. Once we have delivered a product in one in three Indian homes, that day we will think of profitability.

Its a long-term thing. I dont know whether it will take three years or eight. Profitability is not among the top-three metrics we are tracking at a founder level.

They are number of customers, number of sellers and customer experience. Its only about what is the right time. It is very important to time your revenue engine because, otherwise, it will be a short-term view. Right now, we have limited bandwidth and time and we want to use that to grow as much as possible.

Binny Bansal: The ecosystem is also evolving at a very fast pace. So, you have to keep evolving every 12-18 months. With things changing at this pace, its very important for us to keep growing our customer base, keeping them happy. We and our investors are confident that we will be a hugely profitable company.

What is the roadmap to spend the $1 billion

Sachin: We are not looking at any specifics right now. From a vision point of view, we are looking at how commerce happens in India, how they transact, what they want to buy or sell. And what does it mean when it comes online and what are the problems and how they can be solved. We are looking into the seller side of things. Thats much more scalable. There are a large variety of services like quality, which we can be solved using technology. That is somewhere we will definitely invest. Our agenda is to facilitate commerce for 500 million customers on the internet.

Flipkart is known for their reliability and services and we want to preserve that. We have over 3,000 sellers and the number is growing very fast. Though the number is small now, we want to grow it to lakhs, if not millions.

Any plans to push your private labels

Binny: Overall, devices and private labels is going to be a space where we will invest and experiment. Everything we do is going to be big, so its hard to quantify. We experiment a lot and when things work for us, we scale them up in a big way. We will invest in a lot of categories like small appliances, tablets and accessories.

Sachin: For Myntra, its a private brand strategy. We dont have national-level fashion brands in the country and we believe Myntra can make a few big fashion brands, top two or three in their segment. When it comes to gadgets, the way we look at the tablets space is that either they were very expensive or not good. The tablets market is shrinking because the price point is not good.

Why did Flipkart oppose FDI in e-commerce

Sachin: We havent been opposing FDI in e-commerce. Its a misunderstanding. Our only stand is the government is in the best position to decide what is best for the economy and they should take a decision, not specifically for one or two companies. They should take a larger view on the topic. Whatever laws are there, we will comply with. I am not a policy expert, the government is in the best position to decide.

Which competitors make you uncomfortable

Sachin: I dont think any of the competitors are making us uncomfortable. Domestic players are obviously in a better position as they are more local in their approach. Some of the international players will say they are doing pretty good and that they are leaders in the space. We are not thinking about competition. The focus is on what customers want.

Also read: $1 billion in bag, Flipkart now eyes 100 million users