Flipkart-Snapdeal e-commerce war can only benefit Indian buyers
This is not quite the thermonuclear war Steve Jobs threatened on Google, but the Flipkart-Snapdeal skirmishes are quite entertaining. And refreshing, in a corporate culture that has been a bit quaint.opinion Updated: Sep 09, 2015 11:02 IST
This is not quite the thermonuclear war Steve Jobs threatened on Google, but the Flipkart-Snapdeal skirmishes are quite entertaining. And refreshing, in a corporate culture that has been a bit quaint.
Not that there hasn’t been corporate warfare in India. In fact, quite a bit of it. But a lot of it was between people who shared the same surname. One fought back when the brother or the son threatened to hog the family’s business empire. In some cases, the warriors were not related, but those wars were just as serious, bitter, and sad.
This one is quite amusing. Snapdeal’s Kunal Bahl may have fired the first salvo when he told a newspaper at the beginning of August last year that Flipkart looked overvalued to him. "There is a company whose valuation is ridiculously high and there are a bunch of investors there already who have put in a lot of money." No names in that statement, but just a week earlier, Flipkart had become the talk of the start-up town by raising $1 billion.
Since then, they have been at it every now and then. For instance, when Bahl’s co-founder Rohit Bansal was quoted as saying there were not enough good programmers in the country, Flipkart’s Sachin Bansal tweeted, "Don’t blame India for your failure to hire great engineers. They join for culture and challenge."
Rohit clarified that he had been misquoted and that India actually had 'the smartest engineers on the planet'.
The skirmish erupted again in the last few days. Bahl said in a newspaper interview that Snapdeal would become India’s largest online marketplace, overtaking Flipkart, by March next year. For good measure, he also said that the app-only strategy adopted by Myntra, now a part of Flipkart, was 'the most consumer-unfriendly idea I have ever heard of'.
Sure enough, two days later, Mukesh Bansal, who had founded Myntra and is now Flipkart’s head of commerce, hit back. Nobody, he said, will be even half of Flipkart’s size in gross merchandise value. GMV is the total value of all merchandise sold. It has become a key metric to measure growth and valuation of online marketplaces.
At first glance, the Flipkart-Snapdeal fight appears to be a family feud. It has three Bansals on one side and a Bansal and a Bahl on the other. But Flipkart’s Sachin, Binny and Mukesh are not related to one another, nor is any of the three related to Snapdeal’s Rohit. Rohit’s co-founder Kunal Bahl is not a cousin – distant or otherwise – to any of them.
These are five young men who do not have much time for the country’s established corporate niceties. To borrow a favourite cliché of sports writers, they do not hesitate to 'express themselves'.
True, both Flipkart and Snapdeal are online marketplaces – platforms that, for a commission, bring together buyers and sellers. So they are both in the same business segment. But that segment is a large part of the country’s commerce and one day may constitute most of it. It is so large there is space for not only a Flipkart and a Snapdeal but also several others like Amazon, Paytm, ShopClues (all of which are highly valued) and dozens more (which are not as much).
Some banter is fine, and, honestly, quite useful to journalists. (Especially – your columnist says this with envy – to those with The Economic Times.) These are not children of business families being groomed to take over. This is fresh blood being infused into corporate India.
Sachin, Binny, and Rohit went to IIT Delhi. Mukesh, who is the senior most in this lot, to IIT Kanpur. Bahl to Wharton. Anyone who has lived in an engineering college hostel would know what life in those is like. It is not fair to expect them to transform now that they are running their own companies. And whatever for?
One more thing. The festival season is round the corner. Last year’s season was the coming-of-age of Indian e-commerce, when it stole the limelight, at least in perception, from offline retail. The coming season could be bigger. At this point, bragging rights matter.