Binny Bansal, the CEO of Flipkart, India’s e-commerce posterboy, believes heightened competition from rivals will only spur the company forward even as it sharpens its focus on newer technologies to deliver quality offerings to customers. His biggest endeavour will be to improve customer experience, while keeping his employees focussed on innovation. In an interview with FE’s Darlington Jose Hector and PP Thimmaya, Bansal said Flipkart will launch a new private label in the next few weeks to take on competition. This comes in the wake of the news that Amazon is planning to roll out its own private label soon in India. Bansal said while there is a lot of interest from venture funds to invest more in Flipkart, the focus currently is on execution. Excerpts:
How do you see your tenure as Flipkart CEO since you took over in January this year? What have been some of the key changes?
In the last 7-8 months, the focus has been on improving the end to end customer experience. There has been a lot of focus on building payment as a business for the future. I feel quite good about the outcome in both the areas. We have improved the customer experience across categories. We have achieved faster delivery as a whole. We have done of lot of innovation in terms of product quality. We have also launched initiatives like low cost EMI. On the payment side, we have launched the first UPI based payment app in the country. We are looking forward to creating global first innovation across sectors.
How do you see the competitive landscape with Amazon upping the tempo?
If one looks at the history of Flipkart, the market has been fairly competitive with regard to us. I don’t think we ever had lack of competition. We always felt that competition is very good as it increases the pace of innovation overall. If one looks at how the market has grown, Flipkart has innovated and created value for the customer whether launching cash on delivery, 30 day replacement warranty etc or collaboration with Motorola and Xiaomi to provide quality mobile phones at affordable rates. One has to innovate and create value for the customer. In the last 12 months, the market has not grown in the pace that one witnessed in the last 4-5 years. However, of late, the momentum is coming back.
Is Flipkart looking to launch any private labels in the fashion space?
Private labels are something we have done before. Definitely it is an important focus area for the consumers across the length and breadth of the country. We will start seeing a lot of action in next few weeks but I cannot say about the timeline. We have private labels in our portfolio. Today, we have five big brands – Myntra, Jabong, Phonepe, Ekart and of course Flipkart.
Will Flipkart look at raising fresh round of funds?
If you look at the last two years Flipkart has been in talks with companies globally to raise funds. We have raised more than $3 billion till now and most of them came in the last two years. We are fairly well capitalised to invest in areas to drive growth in the future. Our focus is on innovating for the customers. We will keep improving product selection and quality and keep bringing down the costs. As a market leader, Flipkart always has a lot of interest from various investors but the focus is on execution.
How do you see the Indian e-commerce market in 2016 when compared to 2015?
I look at the market with a different long term perspective. In the last 9 years, we have gone from zero to millions of customers shopping online. This actually means that most of the growth is still ahead of us. So the onus is on Flipkart to innovate and grow the market. It is a marathon, there will be ups and down in between. The roadmap is very clear on improving business and customer experience.
What has been the impact from the DIPP guidelines?
The positive thing is that there has been clarity from the government. The life at Flipkart has not changed much as we have been compliant. I think the big game changer is going to be GST. It is the best thing that has happened. We will see our cost of business coming down, sellers & vendors will also become effective.
What is Flipkart’s road to profitability and any plans for an IPO?
It is very simple. We have been focused on profitability since the day we started. The E-commerce business becomes profitable when there is growth and scale. As one keeps growing with scale, the cost keeps coming down. It all boils down to the growth question. We have to be operationally efficient and have made a lot of progress in the last 7-8 months. On the IPO, there is no real plan as of now. We are really very focused on execution. The market is wide open, and the whole team is focused on the innovation game.