Flipkart’s Binny Bansal bullish on IPO, reaffirms omnichannel future
Flipkart is happy to have found a long-term investor in Walmart as the company explores selling items through offline stores, co-founder Binny Bansal said at a conference.Updated: Sep 18, 2018 10:36 IST
Flipkart Group CEO and co-founder Binny Bansal reaffirmed that the e-commerce company is considering selling some items through brick and mortar stores in the coming future as it prepares to expand its reach in the nation since getting acquired by US retail giant Walmart.
In an interview at Recode’s Code Commerce conference, Bansal, who co-founded the company with Sachin Bansal in 2007, said, “Sometime in the future, especially with some categories, omnichannel would make a ton of sense.” This would be contingent upon some regulations falling into the right place, he said. “It is definitely something which would be there in the future,” he added.
Flipkart, which is competing with Amazon India for the top position in India’s e-commerce market, sold 77% stake in the company to Walmart in May this year. The decision to sell majority of stake in the company was worth it to Flipkart, said Bansal, which was looking for a long-term investor.
Bansal said Flipkart needed a “long-term strategic partner backing” to think of “long-term views,” attract good talent pool, and focus on other areas that really matter. Having to raise capital in short intervals from investors “distracts you from the business” and “you also have to manage the numbers.” Some of the other investors in Flipkart include Microsoft and China’s Tencent.
Bullish on IPO
Even after finding a major partner in Walmart, Flipkart is still committed to going public. Bansal said he believes doing an IPO would help the company find the right partners, which would make the company “even more competitive.”
And that competition is increasingly presenting itself. With China favouring local companies, India has emerged as a major opportunity for global companies. Amazon has committed more than $5.5 billion to expand its local business in India, the market size of which is estimated to grow to $50 billion by this year, according to a study by Deloitte and the Associated Chambers of Commerce and Industry of India.
For Bansal, not obsessing too much on the competition and looking at the opportunity is the direction Flipkart is taking to continue its market leading position in the nation. He cited the growth in the number of internet users in India in the recent years, in part because of the entry of Reliance Jio in the telecom space, which he sees as a major opportunity.
Betting on fashion and smartphones
Additionally, said Bansal, several of company’s bets have proven that it can continue to grow. He said buying Myntra in 2014, for instance, helped the company “corner the fashion industry in a major way.” He said the company assumes about 70 to 80% of the online fashion apparel market in the country.
Selling smartphones online has also worked out well for the company, he said. “We created the whole smartphone category in e-commerce in India. One in four smartphones is sold on Flipkart.” (More than two-thirds of smartphones are sold from offline retail stores in India, according to estimates from research firms.)
Bezos’ truck stunt was a ‘gimmick’
The battle between Flipkart and Amazon, which entered India in 2013, began to intensify a year later when Flipkart announced it was raising $1 billion from a group of investors. A day later, Amazon CEO Jeff Bezos, dressed in formal Indian wedding attire, stood on a lorry with a $2 billion check that the company was investing in its local business.
Bansal says that he personally found the whole stunt by Bezos a “gimmick.” But even Bansal credited Amazon India for doing a few things right in the country, though he did not specify those things.
First Published: Sep 18, 2018 10:16 IST