Amazon arrival will not hurt us, says Flipkart CEO Bansal

Leading e-retailer Flipkart is indeed stepping up visibility across the country through hoardings and television advertisements. Still, ask the online chain about the threat from its latest competition, the Amazon-Junglee combine, and it is dismissive of the prospect of the Seattle-based giant hurting its business, at least in its present form.

Amazon.com made an entry into the Indian market last week with Junglee.com, an online shopping site bought by Amazon a few years before. The American retailer opted for the Junglee route due to foreign direct investment restrictions in the multi-brand retail category.

The site, which went live last Friday, said it’s an online shopping service by Amazon “which enables customers to find and discover products from online and offline retailers in India and from Amazon.com.” Junglee.com did not reply to a questionnaire sent by Business Standard.

Flipkart, founded by two former Amazon executives, Binny Bansal and Sachin Bansal, has been a talking point vis-à-vis Amazon’s strategy in India. That includes speculation that the $48-billion Amazon may, one day, take over Flipkart.

On whether Flipkart would need to review its plans after Amazon’s entry via Junglee.com, Sachin Bansal, co-founder & CEO of Flipkart, told Business Standard, “Junglee.com, being an aggregator site that does only price comparison, the value proposition for the customer is limited.” There were already several price comparison sites doing the same thing, he added.

According to Bansal, e-commerce in India is still nascent and the market needs players that can get people to shift from offline to online shopping. “To make this happen, customers need a place they can rely upon to provide a consistent, hassle-free shopping experience. We are fully committed to providing this experience to our customers.”

“Junglee, in its current form, is incapable of meeting these expectations and we do not see this (Amazon-Junglee development) impacting Flipkart’s plans to a great extent,” he added. On whether Flipkart was preparing for an Initial Public Offer, he said the company’s energies were focused on growth, “and we are not thinking of anything else.” Adding: “Flipkart is currently the largest Indian e-retailer (in terms of physical products) and we feel we have the potential to become much, much larger.” When asked about other fund-raising plans, Bansal refused to comment.

What about the speculation that Amazon, largest online retailer in the world, may be looking at buying Flipkart? To that, Bansal said, “Talk of any future acquisition will be speculation and we would not like to comment. We would like to work on our strengths and address the challenges this market is facing. All of this will require a lot of time and investment and selling our business does not feature in our plans. We intend to establish Flipkart as the largest retailer in the country.”

As for ad spends, Bansal refused to elaborate. He said the ads were addressing problems associated with online shopping, while creating awareness of the benefits of e-commerce among offline shoppers.