The responsibility falls
on us to grow the market
An interview with Flipkart CEO Kalyan Krishnamurthy
Edited Excerpts from an interview with Flipkart CEO Kalyan Krishnamurthy. He talks about the company's plans for Big Billion Days, market share, capital and approach to solving problems for India.
So what's different about this year's Big Billion Days sale?
There's a perception that BBD is all about doing big numbers at scale. But that's not the real deal for BBD. What we wanted to do every year is to give something unique and special at scale to the Indian customer. So that's the theme this year. We spend a disproportionate amount of time thinking about that almost 7-8 months prior to the event itself.
There's another perception that this concept of exclusive merchandise which is available on Flipkart is restricted to certain categories like mobile phones and electronic devices and television. That's also not true. The amount of unique selection which has been freshly made by brands for us in categories like home and kitchen, clothing, footwear, fashion and accessories has been enormous. We have strived this time to give customers that selection rather than trying to say that normally you get this for a hundred bucks and this time you get it for ninety-five.
We take our own time to come up with product initiatives but when we do, we actually invest in them and see the adoption. Take our affordability constructs for example. Companies compete on pricing in e-commerce.
We want you to check out paying Rs 15 for instance. Offering different types of instalments, finance schemes are one big way to solve for affordability. We launched product exchange a couple of years ago where something which is Rs 100 will directly go down to Rs 85.
In a small way, we launched furniture as a new category but we launched it with full capabilities. It's very encouraging. We'll scale this up.
Numbers have also been great for us. There's a positive and a bit of a challenge of being a market leader. You have to grow the market. You can't have an argument saying that the market will grow and I will have a disproportionate share. The responsibility falls on us to grow the market.
The general belief is that e-commerce market was growing at about 50-60%. This festival season, we will grow close to double of that. So market expansion will happen in a very big way across customer segments and categories.
What would be your marketshare?
For the festival season, we believe we can comfortably get to a 70-30 share. When we started off, the team believed it was a bit aggressive but today in the middle of the event, our confidence is very very high. It's almost like we'll get there. We're getting a lot of market intelligence that it's a very likely thing. [Editor’s note: This interview was conducted on the night of Friday, September 22, two days before BBD 2017 ended.]
You were part of conceptualising the first Big Billion Day. Must be a big difference now?
The first BBD was a big experiment. And clearly like any other experiment, some things go right and some go wrong. Since then, everything has matured. Our teams have grown with us, systems, platforms and everything has come a long way since the first BBD in terms of reliability, scale and flexibility of platforms.The first BBD, the second BBD to some extent and maybe even the 2016 BBD, was heavily about offering pure value. But this time we have gone way beyond that and said that we'll offer Indian customers selection that they have not seen before and at very good value.
You don't give too many interviews...
I don't. It's not their fault by the way (points to Flipkart's communications team) I just don't like to talk to the media. And we are very busy (laughs).
That's understandable. From a product perspective, you look at Amazon and others, they make certain bets that position them well for the future. Like Alexa and other AI-driven stuff. Do you think Flipkart also needs to position around some of these things?
What I'm very very sensitive to is that we will go with what the Indian customer needs. That's the core of Flipkart since we were founded. Any of these things which we believe will add value to the Indian customer, we will go with that. That's the way we think about our business rather than saying that somebody is launching something in the US and China and quickly copy it. That's not the way we operate. Just imagine, have you heard of any of our affordability construct anywhere else? It's unique to the Indian customer. Last 12-18 months, the company is over-indexed on that rather than saying I'll build a device that somebody is doing somewhere.
You raised a large amount of money recently. How much of a runway does that give you?
What we have done well is that we have generally been self-sufficient. So it's not that we were dependent on that cash to run our business.
You still had a lot of money in the bank when you raised...
That's one way to look at it. The other way to look at it is that we had optimised the business in such a way that the cash flow was well over sufficient for us. That's how we built the business so that for some reason tomorrow if funding becomes difficult, it's a volatile environment and anything can happen, we are not that dependent on external cash. That's the way we had thought about our business. That doesn't change. We aren't going to go on a spending spree. We are very careful with our investors' money.