For a long time Flipkart’s co-founder Binny Bansal stayed away from the limelight and let Sachin Bansal do the talking. Although, after taking over the new role of CEO, Binny comfortably speaks about Flipkart’s past, present and future.
Here are the top 7 things that Binny Bansal said in his recent interviews that spell out the etailer’s view on competition, leadership position, devaluation, reformed ecommerce policies and much more.
Happy with the new guidelines for FDI in ecommerce
Snapdeal’s founder Kunal Bahl expressed his pleasure on the landmark ruling. Amazon too released a statement. But Flipkart remained tight-lipped until now. The homegrown etailer is happy about the fact that the new guidelines will bring clarity. Binny hopes that GST and banking payments are reformed too.
“It is good to have a clear ecommerce policy. I don’t see the policy having a huge impact. We have been compliant till now. Whenever new regulations come in, it takes a little while for everyone to become compliant. For us, we have been lucky that we were already in line with the regulations.”
Compliant? What about WS Retail?
Bye-bye Gross Merchandise Value (GMV), Hello Net Promoter Scores (NPS)
Not too long ago, it was all about the GMV for ecommerce companies. But etailers, industry experts and investors soon realized that GMV doesn’t equal to profitability and only helps to create unrealistic valuations. Therefore, Flipkart has decided to focus on real customer loyalty targets in the shape of NPS rather than GMV. As of now, NPS is Flipkart’s the most crucial performance metric.
“Everyone at Flipkart now has net promoter score (NPS, a key measure of customer satisfaction and loyalty) and customer satisfaction as their most important metrics. NPS breaks down into what product selection is available, how fast it is available, whether it is available all the time, and at what price.”
Flipkart is and will remain the leader, Amazon is not a threat
Indian Online Seller has traced Amazon India’s journey. How it came from nowhere and crawled up the leadership ladder in the last two-three years by giving stiff competition to Flipkart and Snapdeal. Although Binny thinks, Flipkart is the numero uno.
“Look at any brand survey, Flipkart is ahead of anybody else. This is all perception and you need to look at data. I’m fairly bullish about where this will go and our future prospects. Again, I would look at the last eight years of the company and not a year or year-and-a half. In the last eight years, we have created a brand in India.”
Recent markdowns are insignificant
If you thought that the recent devaluations have affected Flipkart, you are wrong. In fact, the CEO feels markdowns by small investors are irrelevant.
“We’ve not asked them (why they have marked down the valuation). They’re very small investors. It’s a global phenomenon; it’s not specific to Flipkart. The funds have their way of (calculating valuations) which isn’t clear. If in future they mark up our valuation by 30%, it’s not like we’re suddenly going to be happy. The way we look at it is that when we raise money, that’s when we get a valuation.”
Enough funds in the company
It was widely speculated that Flipkart is having trouble raising funds and was forced to borrow money from banks. According to Binny Bansal, this is far from being true as they have enough funds.
“We keep talking to investors. We like to raise money on our own terms. We were lucky to raise money when the market was good. The good thing is that we’re not in any tearing hurry to raise or we’re not in dire need of raising money.”
Top most priority – to be extremely consumer-focused
While the etailer may not consider Amazon as a big threat, they have realized that the American firm’s customer-centric approach worked wonders for them. That’s why Flipkart is looking to be ‘very very consumer-focused’.
Binny revealed their three main objectives are to offer its buyers – a wide range of products, low prices and faster delivery. Pleasing customers at any cost is going to be their motto, just like Amazon.
“I think the only way to do that is we need to deliver this value proposition, innovate and solve local problems with local technology solutions. The more we make quality products affordable and available, that’s the only way to maintain our leadership. I am certain that we will remain the largest player, by far. I don’t see a challenge there.”
Top product categories on the platform
Binny disclosed that mobile phone, lifestyle fashion and large appliances (in order) are the three top product categories on Flipkart.
“Home and large appliances is becoming big. FMCG personal care, daily needs, grocery is in the longer time.”
Based on what Binny Bansal has said so far, Flipkart appears to be cool, calm and collected. Is it all a façade or real? Are they really unfazed by the devaluations, Amazon, restrictions on discounts and 25% sales cap? We’ll know once the festive season starts.