New Delhi/Bengaluru: Flipkart Ltd, India’s largest e-commerce firm, is close to naming Saikiran Krishnamurthy, a senior leader in its core commerce business, as the head of its logistics unit ekart, said four people familiar with the matter.
The move is aimed partly at breaking down barriers between ekart and Flipkart’s commerce arm, which until recently were being run as independent businesses, two of the four people said.
Krishnamurthy most recently headed the service product group in Flipkart’s commerce platform.
His team is responsible for order fulfilment, post-delivery and seller services, and is closely linked to ekart, which is a key business for Flipkart, employing more than 20,000 workers who deliver smartphones, clothes, shoes, TVs and other products to customers.
He is expected to take charge this month, the four people cited above said.
Krishnamurthy was one of Flipkart’s high-profile hires last year. The online retailer hired him from consultant McKinsey & Co. in March.
Mint first reported on 12 January that Flipkart has started the hunt for a new chief for ekart.
Flipkart didn’t respond to an email seeking comment.
Krishnamurthy’s proposed appointment as ekart head comes amid a period of upheaval for Flipkart and marks one of Binny Bansal’s first big moves as new Flipkart CEO. Bansal is betting that Krishnamurthy will significantly improve coordination between Flipkart’s commerce platform division and ekart.
In February 2015, Flipkart split the company into three units. Mukesh Bansal ran the marketplace and retail business, which the company calls its commerce platform; then CEO Sachin Bansal took over its fledgling ads business; and Binny Bansal, then chief operating officer, was made head of ekart.
The reorganization was the result of Flipkart’s decision to change its business model to that of an ads-driven marketplace from direct online retail. The change in business model was inspired by China’s Alibaba Group, which went public in September 2014 at a valuation of more than $230 billion.
The reorganization led to a decline in coordination and communication between the commerce platform and ekart, the four people cited above said. And at times, priorities for the two clashed as ekart sought to build its business independently, while Flipkart’s commerce platform team was concerned primarily with growing sales on its own platform. For instance, ekart has started delivering orders for other online retailers this year.
Krishnamurthy will be expected to ensure that ekart and the commerce platform teams work together in a more efficient manner.
Last month, Flipkart also hired a new chief financial officer, Harish Abhichandani, for ekart, after the departure of Mosam Gadia, who was senior director, finance.
Ekart is controlled by an entity called Instakart Services Pvt. Ltd. Last September, Flipkart bought back its logistics business from WS Retail Services Pvt. Ltd via Instakart. WS Retail earlier controlled ekart, apart from being the largest seller on Flipkart’s platform.
Since India bans foreign direct investment in online retail (this is allowed in the marketplace model), Flipkart has devised a maze of many inter-connected and some purportedly independent entities that receive the massive amounts of money it raises to build an integrated e-commerce business.
In January, Flipkart named Binny Bansal as the new CEO, moving Sachin Bansal to the role of executive chairman, to strengthen its management bandwidth as it seeks to combat arch-rival Amazon India and kick off preparations for an expected initial public offering over the next few years.
Binny Bansal’s appointment as CEO was followed a month later by the departures of Mukesh Bansal and chief business officer Ankit Nagori, both of whom are starting their own ventures.
The company is fighting a defining market share battle with online retailers Snapdeal and Amazon India.
Last year, Amazon India gained market share at the expense of Flipkart and Snapdeal (Jasper Infotech Pvt. Ltd), according to publicly available data and several company executives.
Flipkart is also struggling to raise funds at its current valuation of $15 billion because of investor concerns over Amazon breathing down its neck as well as Flipkart’s ballooning losses.
In February, Morgan Stanley Institutional Fund Trust, a minority investor in Flipkart, slashed the value of its holdings in the firm by as much as 27%.
Mint reported on 4 February that China’s Alibaba Group is in early talks to buy a stake in Flipkart and increase its holding in Flipkart rival, Snapdeal. The talks are at a very initial stage and the likelihood of a deal is partly a function of Flipkart’s willingness to offer a discount on its current valuation of $15 billion, Mint reported then.