Kalyan Krishnamurthy, chief executive officer, Flipkart, explains in an interview how the company won back market share in the smartphone business and talks about its current strategy. Edited excerpts:
What was wrong with the smartphone category at Flipkart when you came back in June 2016?
We were focused on other priorities and we had lost a little bit of focus (on smartphones). From the first day I came back, we took a call that we have to absolutely win this category. We were very clear about that.
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How did Flipkart rebuild relationships with smartphone brands who had flocked to Amazon for more than six months?
It was (partly) about rebuilding brand relationships. It was not that the relationships were bad but yeah we could have done better on that. Today it’s very different. (Today) we tell them that we don’t want to deal with you at a model level or just one product line level. We work with brands at the planning level. We go to them and say that what do you want to achieve here in the next 12-18 months. We want to achieve this so let’s plan together, this is what we can do for you. For instance, six launches, this is the kind of marketing we can do, this is the kind of PR (public relations)—so it’s a very holistic plan that we give. Rather than just saying that this launch is on my platform and this is the margin structure. How do you make brands successful over the long-term? That’s what we’ve done well.
More than 60% of your sales come from smartphones. Isn’t this too high?
I can’t comment on the exact numbers but yes a large part of our business comes from mobile phones. But it’s not the way we’ve designed it. That’s how customers are shopping. The country is buying mobile phones so we want to give them that in the best possible way.
If smartphones continue to be such a large part of your business, how will you touch profitability?
Profitability is not the highest priority today. We will again go into a very clear consumer market building mode and expanding the market. We want to bring as many people as possible into the e-commerce fold, as many categories on a regular basis and we will invest towards that. We are very comfortable on the burn that we have today. Burn is not a metric that anybody worries about any more. And with the fund raise, burn is almost irrelevant.