Cash is like a drug… It’s hard to get out of that addiction: Binny Bansal

"We own the three biggest segments of ecommerce market... We have sustainable differentiators on those, and we have not won them because of capital. It's a very different ballgame, and that game Amazon has not won anywhere," says Binny Bansal ,  Chief Executive, Flipkart.

In an exclusive interview with ET’s Madhav Chanchani, Bansal and Krishnamurthy, said that Amazon has taken to replicating some of its strategies. “Cash is like a drug, and when you start solving problems with cash you get addicted to it. It’s hard to get out of that addiction,” Bansal said.

How has 2016 been for Flipkart?
The year has been eventful, to say the least. It’s been a year of turn-around. We have made a lot of progress -lots of hits and a few misses, probably. In the last three months, growth and organisational momentum have come back.From August, we started investing in growth after Kalyan (Krishnamurthy) joined us in July. We had a great (Big Billion Day, or BBD) sale. November was looking really good for the first seven days, before the Prime Minister decided to put a little bit of a spanner on one side of the business (commerce) and accelerated the other side of the business (payments, PhonePe). This month, we are almost back on track. The whole organisational momentum, the mojo and belief is back in a big way.

Krishnamurthy: We grew this year on fundamental and unmatched capabilities. Look at the big categories in which we play in today, like fashion, appliances and televisions, and phones. In fashion, we have become a very clear destination in India with 75%-80% market share. In appliances and TVs,we are the only player in the country with post-transaction servicing capability, which is an integral part of the category.In phones, we have been creating the market since Flipkart was founded. This year, we have introduced affordability with low-cost EMIs and product exchanges. It’s been a year of defensible and capability-driven growth.

Can you quantify how your affordability initiatives have been key to growth?
Bansal: Before we launched affordability, our market share in mid-range smartphones (Rs 8,000 – Rs 20,000) was very high at 30%-40%. In higher-end phones (above Rs 30,000), our market share was about 5%. With these innovations, higher-end phones have become really affordable and you can buy an iPhone 6 on Flipkart for EMIs of Rs 1,500- Rs 2,000.That wasn’t possible before. We have probably increased our market share in that segment by 1,000 basis points (10 percentage (10 percentage points).

What are you planning for groceries category?
We will do pilots. But we are very serious about the category and have a long-term view on it. We believe we are now at a scale where it can be built in a sustainable way, which is through innovation. It’s easy to build it by burning a lot of capital.


Random Posts