Building India’s Amazon: Flipkart CEO Sachin Bansal (Part 7)

Sramana: Does your customer base access Flipkart only through desktops and laptops?

Sachin Bansal: We have mobile commerce, but it has very little traction.

Sachin Bansal: We believe strongly in working with great people. We are now ramping up the company, have 300 employees, and will have 1,000 within a year.

Sramana: What do you need 1,000 workers for?

Sachin Bansal: Our employees are divided across many areas. We have our management team, customer support, software engineering, salespeople, and warehouse operations.

Sramana: How large is your software team?

Sachin Bansal: We have a small team, but it will expand as we grow and need support. We are a technology company at the core. We try to solve as many problems as possible with technology. We have optimized our warehouse operations and our customer support by using technology.

Sramana: Are you reinventing customer support and warehouse systems rather than buying off-the-shelf systems?

Sachin Bansal: We are not buying commercial systems. We were not able to find any that met our requirements. Developing them ourselves gave us flexibility. As a company we are learning 10 or more new things a day. By developing our solutions, we have the flexibility to adapt our solutions to our needs.

Sramana: You are illustrating a very Indian mentality by reinventing the wheel at every level. There is one philosophy of management that wants you to build everything yourselves, and another philosophy that wants you to focus on what you do well. In your case, you do Indian e-commerce very well. You should use the ecosystem for the rest of your needs.

Sachin Bansal: The more we have looked, the more we have not found an ecosystem in India for e-commerce operations.

Sramana: There is an international ecosystem. When you play at the high level of the game, you should be purchasing those systems from international players.

Sachin Bansal: Indian consumers are different and have needs unlike those of any other consumers in the world. The systems that work for other countries do not work in India.

Sramana: You can try and sell me that ideology, but right now I am not buying it. Indian companies believe they have to do everything themselves.

Sachin Bansal: Our understanding is that the systems that are available on the market will not do what we want them to do. We want our growth flexibility incorporated into our systems.

Sramana: What does your competitive landscape look like today?

Sachin Bansal: Our brand is well known today. A bunch of other companies have started after us, but we are the largest, especially in books.

Sramana: What other segments of e-commerce are maturing well in India?

Sachin Bansal: Electronics such as mobile phones. The market is still segmented, and no clear dominant player has emerged yet. We hope to compete there as well. Some people are trying to sell apparel online, but that will be very hard to do in India.

Sramana: What percentage of the book market in India have you been able to capture?

Sachin Bansal: The online market is about 10% of what the established retail book market is. We have more than half of the online book market. The remaining online book market is segmented among very small e-commerce companies.

Sramana: This is a great story, and I hope you go much further. Good luck!

[Also check out my Entrepreneur Journeys book, Seed India – How To Navigate The Seed Capital Gap in India]

This segment is part 7 in the series : Building India's Amazon: Flipkart CEO Sachin Bansal
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Comments

This was a great interview. Thanks you. 🙂

Nilesh Sunday, October 10, 2010 at 1:03 PM PT

Sramana,

Thanks for the excellent interview. I am a regular customer of flipkart since its early days and wondered who are the guys behind them. Its good to learn about them and their strategies.
I have a question on a question you asked Sachin
"Sramana: You can try and sell me that ideology, but right now I am not buying it. Indian companies believe they have to do everything themselves."

Don't you think that the Indian market is different than the American or European market? What works in the US or other markets doesn't work for the Indian markets in most cases. For a company like flipkart which is in the volume business strategies and infrastructure needs will be different than what are required in the US.

Ruchir Monday, October 11, 2010 at 5:31 AM PT

I believe that in e-commerce making these back-end systems efficient 'is' the core business. If this requires highly customized systems, so be it.

Param Aggarwal Tuesday, October 12, 2010 at 9:59 PM PT

I feel theys should come to India as people who wants to send somthing can avoud the delay at custom as esp if its non gadgets….

Udayan Monday, January 24, 2011 at 1:03 PM PT

This is really an admiring interview for anyone .. sachin u doing too good.

sumit bansal Sunday, June 12, 2011 at 4:59 AM PT

Clear toughts and practical approach, great job Sachin.

Sandeep Wednesday, July 20, 2011 at 8:39 PM PT

Sachin, I have been following you and your company since you being a part of book industry and trying to make things simpler. I really appreciate the way you to changed to aroma of book industry and showed them how to get into organize sector .

Gr8 job done . Wishign you all the best

GAURAV Thursday, July 21, 2011 at 4:27 AM PT

(not sure how I got here, but it is an excellent resource)
It does seem like 'back-end' logistics is important, but given India's land holding scene, not important enough to warrant high levels of capitalization. If somebody else is already providing the service, it is a question of service level agreements, cash flow cycles and auditing performances. At this stage it is very hard to tell which strategy will win in the long run, though owning property is always a good thing long term.

My personal view (and a seemingly obvious one) of ecommerce in India is that it has to leapfrog to a 2.8" screen on a crappy browser on a Chinese phone very soon for it to get mass adoption. And the currency trail has to be re-thought altogether, a issue where Africa can offer some insights. Till then we should be trying our phones at retail outlets, and browsing books at the corner store. There is something after all to paper that came from a tree.

Disclaimer: I have exposure to some of our products designed being sold online, but am not entirely privy to the machinations of the logistics and order processing industry.

Vinay Rao Thursday, August 4, 2011 at 9:29 PM PT

I find that Flipkart reinventing the not much needed part of its business or doing a forward integration by taking to undertake delivery of the shipments in major cities.

In fact, to start with Flipkart was using the services of BlueDart and FirstFlight and there were many instances when I have recieved the book the very next morning after ordering it.

However, after few months maybe when their volumes increased or for some other unknown reasons, they started using other service providers to ship.Then,there were instances of delivery not happening in time or without a reminder.Mostly,this is due to the fact that the courier industry in India has not really matured despite the entry of key players like DHL and FedEx.(this is from my experiences, not true with all the players)

Iam sure this way they would be able to redefine the way deliveries are made and who knows Flipkart can have an effective and succesful model of timely delivery for the giants to replicate(a big goal indeed!)once they get to work with their day by day exponentially increasing volumes.

Best Wishes Flipkart and Thanks for the nice interview SRamana.

Raghuraman MV Monday, August 29, 2011 at 2:04 AM PT

it is a very good interview, very candid one.

Surajit Patro Sunday, November 20, 2011 at 3:12 AM PT

Great journey of an entrepreneur thank you for bringing it alive, I tend to disagree on the view on apparel. There are at least 3 apparel and footwear e businesses in top 10 in china for that matter.

Ganesh subramanian Monday, December 26, 2011 at 7:17 AM PT

Awesome journey and great thinking… More than the idea, execution is what is important… Thanks for the interview…

Pradeep P Friday, January 20, 2012 at 7:44 AM PT

Thanks for this interview. I am a student of E.C.E B.tech 2nd year and i too want to start a online shopping site in india and you sir really motivated me . I think your ideas will too help me launching a site like flipkart.

Ashish Ranjan Monday, February 20, 2012 at 2:50 PM PT

Thanks for the post Sramana. It is very helpful. You are a true inspiration in my life. Please let me know your thoughts on social commerce industry in India.

Arjuman Amjad Monday, June 25, 2012 at 12:10 PM PT

There’s hardly an e-commerce industry in India yet … so social commerce is very immature.

Sramana Mitra Tuesday, June 26, 2012 at 1:13 PM PT