We don’t want to win easy, that’s true Flipkart DNA: Kalyan Krishnamurthy

Flipkart CEO Kalyan Krishnamurthy finally has complete control over the online marketplace as well as its fashion unit Myntra (which includes Jabong). In an interview with ET’s Madhav Chanchani, Krishnamurthy outlined his plans for the Walmart-owned company’s fashion business, why grocery has been its toughest category to crack, and why online pharma is a great segment but one for later.

On Binny Bansal’s controversial exit from Flipkart last month, Krishnamurthy said it was a “very difficult time for all of us”. But he pointed out that Bansal remains a board member and the sixth sense he brings as a cofounder remains available to Flipkart.

“We will absolutely continue to rely on it when we make big decisions,” he said. Excerpts:

What has been happening at Flipkart in the past few months?
Over the last 12-18 months we have seeded a lot of multibillion-dollar sectors and categories. What we will do in the next 12-24 months is scale them and get a lot more customer adoption — for furniture, grocery, our refurbished goods platform, 2Gud and our loyalty programme. We bought a company in speech and voice. If you look at them independently, these are industries on their own and not initiatives.

When faced with a short-term easy option and a long-term tougher option, we choose the latter. It yields results over four years. Every product initiative, every business we get into, or people decisions that we take, we make sure it is stable in three to four years.

We launched the private label business two years ago. It did not yield any results for three quarters but today it is a very powerful and influential business. We have over 70% share in the large appliances business, for which we started building the supply chain in 2014. This year, it is truly a big business. That’s true Flipkart DNA, we don’t want to win easy.

What has been the progress in grocery? You talked about launching pilots two years ago.
We acqui-hired the team in 2016 and started building around the second quarter of 2017. It has been a year-anda-half.

You haven’t met some of the city expansion targets chalked out for grocery. What are the challenges?
Look at the market and other players. Almost everyone has zoomed up and then pulled back. Some players also shut down. Because it is very easy to scale a business like grocery, which is heavily branded. You just have to give good discounts and you will go from 1,000 orders a day to 50,000 orders a day just like that. But if you don’t solve it properly it will come down crashing from a unit economics and customer experience point of view.

In the past 10 years, considering whatever Flipkart has built, grocery has been among the toughest to crack. We have already launched in three more cities apart from Bengaluru and have one more city launch coming up.

We will solve the category properly in these five cities, get a disproportionate share, which we already have in Bengaluru, and then scale to more cities in 8-12 months. That is the only way to build for the next 10 years.

What other new businesses at Flipkart will we hear about in 2019?
Scaling up, getting a lot more customer adoption, and salience to our loyalty programme are big focus areas. Our app-in-app project, which we call ‘Project Ultra’ internally, is mostly payments and travel today. That is a multibillion-dollar business. In 2019, you will see that and Flipkart Plus scaling. By February or March, there will an enhanced version of Flipkart Plus. The nature of the programme is loyalty, for which to work is a three-to-four-year game.

Will video and entertainment be a part of it?
At a high level, I can say we will launch video. The company has focused on something — quality products made affordable across private label and fintech solutions. At the core… the focus will not change from that. So will we get into producing and directing movies on our own? The answer is no. We will partner.

Is pharma delivery a category you are keen on?
We are keen, but don’t have the bandwidth to do it over the next six to eight months. But as a horizontal ecommerce platform, Flipkart will have everything. It is just a matter of time. Pharma is a great category – sticky, big and trustdriving.

How are you thinking about the fashion business across Flipkart and Myntra, since you are now in charge of both the companies? We have seen some layoffs and team restructuring. What synergies are you planning?
After grocery (online+offline retail), the fashion business is the second-biggest product commerce category in the country. The two teams (Flipkart Fashion and Myntra) have their own skills and capabilities — we will preserve those. We don’t want to force-fit any integration between the two teams. But… if there are easy synergies that the two firms can harvest, (that will be) a part of my job.

Amazon has bought stakes in multiple retailers in India. What is your thinking on physical and omni-channel retail?
We will explore partnerships. There are a lot of categories where physical retail will be meaningful from a customer value proposition. We will look at partnerships opportunistically. We don’t just look at what is going on in the market and quickly jump into things.

Two years ago, you said in an interview that founders bring a sixth sense to a company. Now Binny Bansal, too, has exited Flipkart.

What does this mean for the company?
It has been difficult. I am not going to lie. It was a very difficult time for all of us, more for Binny. He continues to be on our board and the sixth sense that he brings is very much available, exclusively for all the leaders here. We will absolutely continue to rely on it when we make big decisions.

The development was reported by ETRetail.com

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