We believe e-commerce can touch $100 bn: Flipkart CEO Kalyan Krishnamurthy

Being an industry leader, the role that Flipkart plays is to expand the market, says Krishnamurthy

Walmart-owned e-commerce giant Flipkart has witnessed blockbuster festive season sales, though the firm was initially concerned about pulling off the event remotely because of the pandemic. In an interview with Peerzada Abrar, its Chief Executive Officer Kalyan Krishnamurthy says the company has introduced many features, including launching in more languages, to drive sales across the country. Edited excerpts:

How has this year’s Big Billion Days (BBD) event performed compared to the past? 

Being an industry leader, the role that Flipkart plays is to expand the market. This includes getting as many customers to shop on e-commerce platforms as possible. The event has been very successful. Most of our customer metrics, including active customers, new customers, and reactivated customers have all grown over 50 per cent on a fairly meaningful base. For BBD, we had started a construct, which eventually got copied by other players. 

Affordability constructs, including partnering with financial institutions and offering consumers excellent credit products, was very well received. We also launched new languages. More customers were able to shop in their native languages. For the first time, Flipkart also launched a hyperlocal shopping construct called Flipkart Quick.

Were you concerned because BBD was hosted remotely at such a large scale?

Yes, I won’t say it has been easy. We had the opportunity to request our colleagues to come together and work from our facilities, but the number one metric for all leaders at Flipkart is employee safety. We continued to work remotely and operated from home. Employees at Flipkart have a lot of passion for setting the tone or the festive season. Everybody put their best foot forward. When something goes unplanned or there is a problem, that’s when it gets a bit tricky as people are not able to meet. 

But the culture at the company has been a combination of being audacious, ability to work under uncertain circumstances and having high levels of ownership. All of that came together and we were able to pull it off quite smoothly.

What kind of business has Flipkart witnessed? According to research firm RedSeer, Flipkart has posted more than double the sales of Amazon…

Flipkart gains a few points of market share during every festive season. But what has been (reported) through the research firm, is not very different from Flipkart’s usual market share and what it has commanded over the past three years. It has been going up and down a little bit, depending on the season, but that has been the case more or less.

How has Covid-19 accelerated the shift to e-commerce?

There was a shutdown of the non-essential economy for a couple of months. What we saw between June and August was that we were addressing pent-up demand. There was a little bit of an explosion at that time. That is over now. There are also people who are unable to go to malls and big department stores to buy. So there has been a little bit of a shift to e-commerce. We are seeing modern retail, including e-commerce, booming.

Earlier the estimates of what e-commerce can reach by 2024 was about $60 billion to $70 billion. It has really been revised upwards. We now believe it can actually touch about $100 billion by 2024. There is a real shift in consumer preference and it is moving towards digital discovery. The pandemic has played a short-term role in this, but there is a realisation among consumers, sellers and brands about the value proposition that e-commerce can provide.

What kind of growth is being driven by new consumers in tier-2, tier-3 towns and beyond? 

The philosophy of the company is to democratise e-commerce. Almost 100 per cent of innovations in the sector have come from Flipkart. These include voice-based commerce and local language commerce. Through our own and partner logistics network, Flipkart delivers to about 23,000 pin codes, including the Indo-Pak border. Flipkart builds the widest selection across various price points using data and by partnering with sellers. 

Flipkart is not only for wealthy Indian consumers. We want everybody to buy everything from us. Customers can shop in their native language. This is the heart of Flipkart and the way it has been built.

You recently made investments in Arvind Fashions and Aditya Birla Fashion and Retail. How are your strategic investments shaping up?

The starting point of any deep partnership and investment discussion with Flipkart is that there has to be a very strong culture and value match. We partnered with companies who think long term, like 10 years, and not the next quarter or year. They have strong business ethics and operate in the right spirit for all the communities they work with. In the case of Aditya Birla Fashion, we saw that from the beginning. We’ve known them for several years. We saw a very strong match in terms of culture, values and the way they conduct business. We noticed that the capabilities that the two businesses bring are very different and completely complementary to each other.

We have over 3,000 engineers who solve local technology problems. If you look at players like Aditya Birla Fashion or Arvind Fashions they have created a range of strong and trusted brands and a huge network of stores. We believe there can be several ways for these capabilities to come together and help each other to grow. We will look at more (such) partnerships with companies that are built on strong ethics, values and culture and have complementary capability skills. We’ve done (many) partnerships, including investments. We bought Walmart India’s wholesale business and invested in Shadowfax and Ninjacart. We’ll continue to look for more. The philosophy of the company has been to grow through partnerships to make sure that the entire ecosystem is successful.

You said Flipkart can bring in huge benefits for Indian farmers. Any new developments on that front? And what is the status of your application to enter the food retail business?

We are committed to leveraging technology to bring benefits to the agriculture ecosystem. We are working to re-apply for the food retail licence taking the government’s feedback on the issue. We are very hopeful that we will actually be able to get the required approvals.