Flipkart’s CEO Kalyan Krishnamurthy is confident the next 50-100 million Indian customers who will come on board the online retail market will be driven by local innovations introduced by the home-grown e-commerce company and not by a foreign player. In an exclusive chat with TOI, Krishnamurthy -who took over from Flipkart’s co-founder Binny Bansal last year -said the Bengaluru-based web retailer was the clear leader in all categories, except grocery, which it is yet to launch, disputing Amazon‘s claim of being ahead. “We at Flipkart (not including Myntra and Jabong), are much bigger and outsell them (Amazon) in all categories, except grocery where we are not present but will be entering soon.”Both Amazon and Flipkart do not detail their market shares based on units shipped or sales, however, we have been reporting these numbers sourced from logistics companies and other third-party platforms.
Both Amazon and Flipkart do not detail their market shares based on units shipped or sales, however, we have been reporting these numbers sourced from logistics companies and other third-party platforms.
While Flipkart is still ahead at the group level and is clocking gross merchandise value (GMV) based on a large number of high-value items it sells like smartphones, it’s tough to separate the two in the GMV battle. GMV is all the sales made on e-commerce marketplaces, out of which players like Flipkart and Amazon earn commissions.
To expand its user base and growth, Krishnamurthy, who has been dubbed the turnaround man’ at the company for his execution skills, said the 10-year-old online retailer will push customer loyalty in a very local way through a programme it will launch soon. An ex-Tiger Global executive, he wouldn’t admit to any similarities with Amazon’s popular subscription service Prime. The domestic e-tailer has experimented with Prime like services such as Flipkart First and Flipkart Assured, which haven’t been scaled up.
“We deeply understand the Indian consumer and innovate for them with the help of technology. We introduced the concept of catering to the Middle India by building affordability constructs through product exchange, upgrade on return, and low-cost EMIs instead of just doling out discounts,” he said.
Flipkart grappled with a string of issues in 2015 up until a mid-last year, foremost being the continued senior level management churn, including the stepping away of both its founders (Sachin Bansal and Binny Bansal) from operational roles. All of this slowed down its growth perceptibly just when Amazon was doubling down on the India market. Flipkart’s GMV stagnated, mirroring the e-commerce market which, too, started to plateau by the end of 2015 and the Indian e-tailer was unable to add new categories, becoming largely restricted to selling mobiles and electronics.
Krishnamurthy said Flipkart took the time to launch new categories because it worked on finding solutions. “We just don’t come in and give discounts to get adoption. It has taken almost a year to launch furniture but that’s the only time to market. You can say you are late to the market, but we have to solve for the opportunities and pain points of consumers,” he said.
The next big challenge for most consumer Internet companies like Flipkart from here on is to penetrate deeper into newer markets and consumer segments. “The market growth and innovation will depend on Flipkart. If we are able to innovate for the next 50100 million, then the market will grow. That is how it has been so far and we will keep doing it every year,” Krishnamurthy said.Currently around 50-60 million consumers make purchases online in India. Estimates had indicated this market will grow exponentially, paralleling China, which has not happened after frenetic growth years of 2014-15.
With the push on content, grocery and Prime, Amazon too is gunning for a bigger market with returning consumers. Having already ploughed $2 billion into its India operations, Amazon’s founder Jeff Bezos committed another $ 3 billion to win here. In a recent interaction with TOI, Amit Agarwal, the Amazon India head said, the e-commerce juggernaut was looking to make India a 500 million strong market with the primary focus is to expand e-commerce usage.
Source: Times OF India