Flipkart in no rush to raise funds, says CEO Binny Bansal
Bengaluru: A day after rival Amazon India said it recorded nearly three times higher sales this festive season (compared to last), Flipkart claimed it outsold Amazon in terms of gross merchandise value (GMV) in October.
Flipkart chief executive officer Binny Bansal said in a telephone interview that the company’s October performance is testament to its ability to beat “a 22-year-old global behemoth”, a reference to Amazon.com Inc. Bansal also spoke about Flipkart’s fundraising plans, talks with potential strategic and financial investors, and the key new categories that it will bet on over the next five years. Edited excerpts:
You said you have outsold Amazon in October. How do you plan to keep this up?
What happened in October was a culmination of a lot of things that we’ve been doing over 8-10 months: innovations in marketing, merchandise planning, our focus on the core categories, supply chain cost optimization, and technology—the front-end technology was completely flawless. ...then a lot of these things such as no-cost EMI... scaling that up, and scaling up product exchange. So, it’s about having the right customer focus, the right local knowledge, the local innovations for the customer base—we need to continue doing that, and we will continue doing that. You will start seeing a lot of that.
Smartphones, fashion and large appliances are the three biggest categories. Which are the new ones that could be game changers over the next year?
I think the next one year is too short a time-frame. No category can change the face of e-commerce in one year. If you take a five-year view, then grocery, FMCG (fast moving consumer goods) and furniture become very important categories as well.
You seem to have launched FMCG today (Tuesday) on your platform.
We are doing some experiments. I wouldn’t say these are launches. I think it’s very important to figure out the right, sustainable business model for the categories.
Because selling a category at negative 50% margin is very unique; that’s something we don’t want to do. We want to make sure we have the right sustainable model, which we can scale
When will you go for a fund-raise? Does the October performance set you up well?
From a fundraise perspective, we’ve always said Flipkart likes to raise funds when they are available than when we need them. And we have raised enough money in the past, so there is no rush. We keep talking to investors all the time, and I think when there is a right match of expectations from both sides—that’s the way we like to raise funds.
Do you expect investors to be more willing to meet Flipkart’s terms this time?
If I look at the overall sentiment across the market, I think it is improving. Not just Flipkart, if you look across the board, I think there is improved performance from Indian start-ups. I think we will see investments getting back on track sometime in the second quarter of next year.
There has been speculation that Wal-Mart and Alibaba have held talks with you. Do you think it’s time for a strategic investor to come in?
We’ve always had discussions with financial investors and these strategic investors in the past as well. And we continue to do the same even now. As I said, it depends on when expectations match. When that happens—that is the trigger.