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We don't want to remain a small profitable company: Sachin Bansal & Binny Bansal

Interview with CEO & COO, Flipkart

Bibhu Ranjan Mishra  |  Bangalore 

Flipkart, India’s largest e-tailer, on Wednesday announced it raised $200 million in a fresh round of funding, making it the single largest investment round in an e-commerce company in India. Co-founders Sachin Bansal (also the CEO) and Binny Bansal (the COO), tell Bibhu Ranjan Mishra that the funding is a recognition of India’s e-commerce story. Excerpts:

What does this fresh round of funding mean for you?
From our point of view, it is a big validation of what we have believed in, and what we have reiterated. In a way, it is also a validation of India’s e-commerce story as a whole and Flipkart in particular. Recently, Technopak released a study which says that $76 billion of e-commerce is going to happen in India by 2021, compared to just $1 billion last year. Our funding proves that investors are now willing to put their money in this growth story.

You have raised funding periodically. How would you like to use the fresh capital?
The money that we have raised will be used to scale up our technology investments; improving supply chain (warehousing, logistics) and also developing talents. Since e-commerce is a new sector, we have to create the talent pool as ready-made talents are quite scarce to get. We are hiring from the best colleges and attracting talents from other industries as well. We are also investing in scaling up our marketplace platform and developing mobile commerce platform which are the future.

Why did you foray into a marketplace model? Don’t you think you are slightly late to adopt this?
Marketplace has always been in our long-term plan. Perhaps it has taken a little longer than what we had wanted.

Of late, investors seem to reluctant to put money into inventory-based e-commerce platforms. Has your decision to adopt a marketplace model something to do with this funding?
No. Marketplace solves the basic problems of the customers – selection. It allows us to tap into the efforts and the knowledge of thousands of people who have been in business for so many years. We are tapping into their intelligence of understanding of the market.

Are you completely moving to a marketplace model?
We have a wholesale cash-and-carry business. Eventually, we will become a pure marketplace platform. That is where we are moving forward. But our goal is to grow the marketplace very fast and attracts hundreds and thousands of sellers to offer our customers a wide variety of choice.

By when are you expecting to be profitable? There is a belief in the industry today that you are hardly making any money?
Profitability is not a focus area. It’s a strategic decision. We can be profitable from today if we want. We can stop investing in one area and start making profits; it’s definitely possible. But we don’t want to remain as a small profitable company. That is certainly not what we are aspiring for when the market opportunity is so huge. If one wants to focus making profits quickly, then e-commerce is not the place for him. We want Flipkart to become synonymous with shopping in India.

Do you have plans to go for an initial public offer (IPO)?
These are still very early days to talk about an IPO. But it may eventually happen at some point of time. But today, we are very well-funded. The focus is to execute and grow. Our target is to sell about $1 billion worth of goods in a year by 2015. We have crossed almost the half-way mark, and are quite hopeful to reach that milestone.

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First Published: Thu, July 11 2013. 00:44 IST