Shakeup at Flipkart symbolises intense battle against Amazon
Former Tiger Global executive Kalyan Krishnamurthy becomes Flipkart CEO, co-founder Binny Bansal becomes Group CEO as Flipkart continues its restructuring a second year in a row, after Amazon becomes a close rival.business Updated: Jan 10, 2017 12:34 IST
In the past three years Amazon, Flipkart’s biggest rival has become a close second in India’s $20 billion e-commerce market. In many months of 2016, Amazon outsold Flipkart, but somehow the home-grown e-commerce giant managed to stay ahead.
That has led to a number of changes at Flipkart, the most recent being its new CEO. Kalyan Krishnamurthy, replaced Binny Bansal (who became the Group CEO) on Monday, marking the end to an era where the founders Binny and Sachin Bansal (both are not related) were CEOs of India’s largest online retailer.
Krishnamurthy joined Flipkart from Tiger Global, the e-commerce firm’s largest investor, which valued the company at over $15 billion at its peak, just over a year ago.
Flipkart’s current valuation is down to a third to $5.5 billion. To put things in perspective, Krishnamurthy’s game – he is known to be running the show at Flipkart – hasn’t completely worked.
Krishnamurthy is also called Lee Fixel’s man on ground. Fixel is the global head of Tiger Global’s investment.
As the category management design head, Krishnamurthy focused on electronics, fashion and large appliances, while its rival, Amazon focused on everything from daily essentials, to masalas like hing and churan, to everything else that Flipkart sold. As a result, during the Diwali sale, Amazon sold more products (though it made less money) than Flipkart.
As Krishnamurthy took charge at Flipkart, after losses soared due to high competition from Amazon, many who held key roles inside the company, quit.
Krishnamurthy joined Flipkart in June 2016, when Amazon’s founder and CEO Jeff Bezos announced that it will increase investments into India from $2 billion to $5 billion. The war had just begun.
Since then, Amazon has continues to increase its categories, launched new ones, including private labels (Flipkart followed), started Amazon Prime privilege membership, and videos (which comes free with the Prime membership).
Meanwhile, Krishnamurthy continued to interact directly with people, reported a financial daily. He started mentoring many senior managers who are category leaders, now.
Krishnamurthy’s most critical role will be to turnaround Flipkart, increase its lead over Amazon, and establish a profitable business. “We are now ready to build the Flipkart of the future as we continue on our journey of transforming commerce in India through technology. I am confident that this new organisation structure will deliver further value for Flipkart group,” Binny said in a statement.
Flipkart is a conglomerate of e-commerce companies – Flipkart, fashion e-trailers Myntra and Jabong, payments app PhonePe, and logistics company Ekart.
Ananth Narayanan will continue as the CEO of Myntra and Jabong, Sameer Nigam, CEO PhonePe. Krishnamurthy will report to Binny.
First Published: Jan 10, 2017 11:22 IST