E-Commerce

Flipkart and Myntra exchange employees to level the waters

Flipkart is the leading e-commerce player in India. After its inception in 2007 as an online bookstore, Flipkart has sailed through many kinds of waters. It has tasted a lot of defeats but victories have been sweeter than all of those. It is, even after rapid growth from Amazon India, the number one e-commerce website in India. There have been many strategies involved in the making of Flipkart that it is today.

There were some special strategies involved to fight off Amazon. Its battle with Amazon for the first place was always going to be tough with the giants being the oldest online retailers. Amazon India grew from $0.2 billion in 2015 to $3.2 billion in 2018. Their growth rate was 283% to Flipkart’s mere 17% in a year. The Indian company had to battle such growth and they did.

Their strategies were sharp acquisitions of companies around to improve their place. Flipkart’s most prized acquisition to date is Myntra. In May 2014, Flipkart’s the then CEO Sachin Bansal decided to enter in the fashion market. The best way to do that was to acquire India’s biggest online fashion store and they did.

In a supposedly INR 2000 crore deal, Flipkart bought Myntra. It was a 100% acquisition and marked Flipkart’s entry in the fashion market. It has not looked back ever since. Since its acquisition of Myntra, Flipkart has gone on to be the number one online fashion mart. The next step for the leaders was another acquisition. However, this time, Myntra was the one to do the deal.

Jabong, another famous online fashion retailer did the deal with Myntra. It was bought off at $70 million. This made Flipkart the undisputed winners in the online fashion industry. These kinds of acquisitions and the severe will to be on top kept Flipkart in line with the growth of Amazon. Its 2018 and Flipkart even after some strong competition from Amazon are number one.  Its revenues stood at $3.8 billion as of FY 2018.

However, Walmart came knocking on doors of Flipkart in the mid 2018s. After failing to enter the Indian market once, Walmart’s only way in was this. They bought 77% of the biggest Indian e-commerce company. The deal was wrapped up at $16 billion with its valuation going over $20 billion. This acquisition of Flipkart by Walmart has many angles to it.

That said, the first thing Walmart did was combine Myntra and Jabong. This helped to cut down the complications as both Myntra and Jabong could both operate under single leadership of Kalyan Krishnamurthy. A month after this there is a lot of noise coming out of those offices. Rumors are Flipkart and Myntra and exchanging employees to come on level terms.

Walmart’s Flipkart is, as believed, trying to rebuild its fashion side of the business. This has led to a lot of shuffles across the two chains. Chief Technical Officer (CTO) Jeyandran Venugopal of Myntra has been handed Flipkart’s engineering division. While Consumer Shopping Experience head Amar Nagaram has had to jump ships to Myntra in a new role carved out for him as Chief Technology and Product Officer (CTPO). These high profile exchanges were not confirmed by Flipkart but seemed to have taken place. Between all these reappointments, Ananth Narayanan, Myntra’s CEO is rumored to quit in a month or two.

However, the Narayanan who is promised $20-25 million stock options is not going out easy. Walmart, the parent company is making it hard as it doesn’t want to give a full cash out to the current Myntra CEO.

– Unmesh Phule

 

Comment here