NEW DELHI: India’s largest e-commerce company, Flipkart, which has a new valuation, down by a third from last year, has taken up a complete organisation-restructuring plan. With CEO and co-founder Binny Bansal at the helm, the company will create new business units, merge some and demolish some.
In what it calls Flipkart stories, the company said: “The organisational restructuring involves the creation of new business units in some cases and mergers in others.”
The payment business might become a separate business unit (Flipkart had acquired payments startup PhonePe in April). The engineering teams will be integrated into one team, headed by Peeyush Ranjan. It has also created a new unit called the customer shopping experience group. The campus programme that deals in hiring of management graduates is also being restructured, which the company said has led to a sixmonth delay in joining of graduates. EKART, its logistics arm, is on its own, independent serving other e-commerce companies, including rival Paytm.
The company said the restructuring looks to strike the right balance between “innovation, strategic execution and operational execution”.
The change comes at a time when there have been about a dozen exits, including head of commerce and advertising Mukesh Bansal, chief business officer Ankit Nagori, and chief product officer Punit Soni.
Binny Bansal replaced cofounder Sachin Bansal (they are not related) as Flipkart’s CEO in November. A company spokesperson said this kind of restructuring happens out of need. Another official said it was to increase focus on customers. “When a company gets a lot of scale, it needs to focus on fewer things and leave the rest. Flipkart was doing too many things,” said a partner with one of the big four consultancy giants.
Earlier this year, Flipkart started restructuring its retail and marketplace business, called the commerce platform. This unit will have three product groups —marketplace, consumer and service — and an engineering division.
The e-commerce boom in India was mainly led by heavy discounts. But that’s changing. Investors are looking at better unit economics. Binny had told earlier, just before he became CEO, that Flipkart is looking at becoming profitable in a couple of years.