BENGALURU/NEW DELHI: India’s largest e-commerce firm Flipkart is running out of time to meet aggressive targets set first by CEO Binny Bansal and then by Kalyan Krishnamurthy, the representative of Flipkart’s largest investor, Tiger Global Management, who is now effectively running the company’s key business.
Flipkart wants to achieve three key goals among others by September, according to three people familiar with the matter. One, generate monthly gross sales of ₹3,700-3,800 crore by expanding sales of smartphones, large appliances and fashion; two, achieve a net promoter score (NPS), a key metric of customer satisfaction, of 55 partly by improving the speed and consistency of product deliveries and improving product returns management; and three, break even at the gross profit level by cutting staff costs, discounts and other expenses.
Separately, Flipkart has also set a goal of generating ₹6,000 crore in monthly sales by March, source said.
On all three metrics, Flipkart is currently far behind, the people said.
Monthly gross sales are estimated at ₹2,000 crore; NPS is around 30 or 50, depending on how it is measured; and mobile phones and large appliances categories are in the red.
“Our internal numbers and targets are confidential and as a matter of policy, we do not share these figures ,” said a company spokesperson in an email. The company, says the numbers stated by Mint were incorrect.
{{/usCountry}}“Our internal numbers and targets are confidential and as a matter of policy, we do not share these figures ,” said a company spokesperson in an email. The company, says the numbers stated by Mint were incorrect.
{{/usCountry}}Achieving these targets, or getting close to them, is seen as crucial for Flipkart in its efforts to raise its next round of funds at a valuation it can command rather than being forced to take cash at a distressed value. While Flipkart is well funded for now, it will need to raise cash at some point soon to refill its coffers. Not just that, Flipkart needs to regain the initiative it has lost in the expensive market share battle with arch-rival Amazon India (Amazon Seller Services Pvt. Ltd) and at the same time, cut losses as investors put pressure on the company to get ready for an initial public offering at some point.