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  1. Perform or perish mantra drove Flipkart management reshuffle

Perform or perish mantra drove Flipkart management reshuffle

The key management changes at Flipkart point to the direction that only performance counts in the fiercely competitive e-commerce industry, even if it means the co-founders have to take a backseat operationally.

By: | Bengaluru | Published: January 11, 2017 6:29 AM
Flipkart was seen faltering in its execution strategy to counter Amazon and the changes are a result of this. (Reuters) Flipkart was seen faltering in its execution strategy to counter Amazon and the changes are a result of this. (Reuters)

The key management changes at Flipkart point to the direction that only performance counts in the fiercely competitive e-commerce industry, even if it means the co-founders have to take a backseat operationally.

The appointment of Kalyan Krishnamurthy as its new CEO, who is key investor Tiger Global’s representative, is a clear indication of this.

Flipkart was seen faltering in its execution strategy to counter Amazon and the changes are a result of this. An investor in Flipkart told FE, “Enough time was given to both the founders Binny and Sachin Bansal to deliver on the goals but Kalyan has proved himself especially during the last Big Billion Day sale as Flipkart held its ground and maintained the upper hand with regard to Amazon.”

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Flipkart on Monday had announced that Kalyan Krishnamurthy, head, category design organisation would take over as the CEO of the e-commerce business while co-founder, Binny Bansal will be elevated as the Group CEO. Kalyan Krishnamurthy was the India head of Tiger Global, the largest private equity investor in Flipkart. He came into this key executive role in Flipkart in June, 2016.

According to sources, the top heavy management structure proved to be counter productive for the e-commerce major. A business partner of Flipkart told FE that the key executives with inflated compensation structures were more interested in protecting their turf rather than focusing on growing the business.

Kalyan Krishnamurthy, who came into Flipkart, was seen as somebody who was market driven with superior grasp on the operational aspects of e-commerce business. Prior to his entry, Flipkart was losing out on the exclusive launches of new mobile phone brands with Amazon gaining the upper hand. Krishnamurthy managed to bring back these brands into the Flipkart fold and also streamlined the various other operational parameters.

Anil Kumar, CEO, RedSeer Consulting, a research and advisory firm said, “Kalyan has been a fantastic performer in an evolving Indian e-commerce market.”

In the new leadership structure, the two founders of Flipkart now have a broader strategic role while the operational aspects will the responsibility of the other executives. Here the role of Tiger Global, the largest investor in Flipkart, becomes more pronounced.

Harish H V, partner, Grant Thorton, said, “It is not essential for the founding team to run the operations. In the case of Flipkart, bulk of the shareholders are outside investors and perhaps they believe that this new team will deliver on the goals.”

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