INTERVIEW OF A FAMOUS INDIAN ENTREPRENEUR 1. INTRODUCTION 2. AIMS AND OBJECTIVES 3. METHODS AND METHODOLOGIES 4. DETAILED REPORT OF THE PROJECT 5. ANALYSIS OF THE DATA 6. CONCLUSION 7. DISCUSSION 8. OPINIONS AND SUGGESTIONS 9. BIBLIOGRAPHY AND REFERENCES
INTRODUCTION Entrepreneur is a person who sets up a business or businesses, taking on financial risks in the hope of profit. Flipkart, which is regarded as one of the most popular and successful e-commerce ventures in India, was started by Sachin Bansal in 2007, post his job at Amazon. What initially started off as a Website that sold books, quickly expanded into a platform offering products in various categories, ranging from electronic goods to stationary supplies. Since it’s launch, Flipkart has gone from 5 to 4500+ employees, 4 acquisitions, 5 payment options and was even listed as the top 20 Websites in the country.
Sachin Bansal shares his journey from Flipkart’s inception to what it is today in the following interview.
AIMS AND OBJECTIVES The aim of this project is to provide a detailed report of an interview with Sachin Bansal, one of India’s leading entrepreneurs today.
OBJECTIVES
To get acquainted with the different entrepreneurship skills required of running a company. Informational interviews are terrific for finding out more about what it takes to be a successful entrepreneur. Entrepreneurial spirit is characterized by innovation and risk-taking. This project will help learning this spirit by hearing stories from such entrepreneurs. Entrepreneurs are leaders, willing to take risk and exercise initiative, taking advantage of market opportunities by planning, organizing, and employing resources, often by innovating new or improving existing products. This project will have an impact on the reader as the interview will give valuable insights for the development of these qualities. The interview will be an inspiration for budding entrepreneurs especially those in IT and e-commerce in India.
METHODOLOGY The method used for this project is a personal interview. Following are the list of questions asked in the interview. Q) When and how did the idea of Flipkart came into being? Q) Initially Flipkart has started with books but now it also forayed in to products in other categories such as mobiles, movies, music, games, cameras and computers. What is the strategy behind such diversification? Q) Flipkart started its Business journey from five people and now you have 4500 + employees. How do you see this journey of success? Q) What are the biggest challenges you faced at the time of starting Flipkart and what are the present challenges you face in running it? Q) Despite of being on online platform, Flipkart has started with word of mouth Marketing strategy and now Flipkart is visible on TV and print medium as well. How well do you think the strategy of word of mouth Marketing helped? Q) What will be your suggestion for new startups or students planning to take up entrepreneurship in online retail?
DETAILED REPORT OF THE PROJECT The complete interview is as follows: Q) When and how did the idea of Flipkart came into being? A) We started Flipkart in the latter half of 2007. When we started, the country was already witnessing quite a bit of interest in e-commerce in the form of booking of online tickets etc. Our first thought was to start a comparison shopping Website that would cater to the growing Indian e-commerce market. However, when we further probed the idea, our research revealed that companies in India had still not succeeded in creating a comprehensive e-commerce ecosystem that ensures convenience and security from the customer’s perspective. The entire category was plagued with issues like delayed deliveries; wrong product deliveries, improper product description etc. Sensing an opportunity, we decided to start an e-commerce company that would focus on providing a great shopping experience to its customers. Q) Initially Flipkart has started with books but now it also forayed in to products in other categories such as mobiles, movies, music, games, cameras and computers. What is the strategy behind such diversification? A) From the beginning, our intention was to make Flipkart the largest e-commerce portal in the country. We started by retailing books and after becoming a market leader in this segment we introduced other product categories such as mobiles, movies, music, games, cameras and computers. Our aim is to achieve similar success in these categories while maintaining our USP of a superior customer experience. Q) Flipkart started its Business journey from five people and now you have 4500 + employees. How do you see this journey of success? A) The journey has been an extremely interesting and rewarding one. We started off as a modest venture and in just under four years have gone on to become one of India’s leading online shopping destinations. Our focus has always been on keeping our customers satisfied by ensuring convenience and a hassle free shopping experience at every customer engagement point – not to mention the great discounts and product variety that we have to offer. Q) What are the biggest challenges you faced at the time of starting Flipkart and what are the present challenges you face in running it? A) The initial challenges we faced were teething troubles common to most start-ups. It was tough to generate supplier confidence in us and the inability to keep a large enough inventory posed an issue. Slowly however, we succeeded in building up both customer and supplier confidence. Traffic to the site started picking up through word-of-mouth publicity and from then on there has been no looking back. Today, the challenges are different. We have built our Business on the premise of providing a great shopping experience to the customer and our biggest challenge is to maintain the same quality of service while we rapidly scale up the size of our operations. The other challenge is to think big; in terms of scales that are yet to be employed in online retail businesses (travel being an exception) in India. Q) Despite of being on online platform, Flipkart has started with word of mouth Marketing strategy and now Flipkart is visible on TV and print medium as well. How well do you think the strategy of word of mouth Marketing helped? A) We started Flipkart on a modest budget. The initial capital was sourced from our personal money and we did not have a huge Marketing budget. Hence we relied heavily on word-of-mouth Marketing to promote our site.
Moreover, when it comes to mediums like e-commerce, word-of-mouth Marketing works extremely well as customers rely on the experience and feedback of their friends and peers before they try out a site. Q) What will be your suggestion for new startups or students planning to take up entrepreneurship in online retail? A) Our suggestion for new start-ups in online retail will be to focus on keeping their customers happy. In online retail, repeat purchase plays a big role as getting a new customer to buy from your Website is much tougher than getting an existing customer to repurchase. By putting the needs of their customer first and listening to what they have to say, companies can succeed in building up a loyal customer base.
ANALYSIS OF DATA The Genesis In an interview, Sachin had said, “The idea itself is not new. The genesis of the thought to set up Flipkart came from the bad quality service provided by competitors. Our business opportunity was to do better than our competition in terms of service. Hence, our main mission was to focus on customer service. As a startup company with ambitions in the ecommerce domain, we had to choose a category that could facilitate getting started quickly. The low transaction size helped induce customer trials. With our strong technology background, we could keep the initial costs low.”
Getting it right offline Seven years ago when Flipkart was started as an online platform for selling books, Sachin remembers going across the roads of Bangalore to procure the orders from small distributors. Recalling one of the marketing strategies, he says, “We used to stand outside Gangaram Book Stores on Church Street and hand over Flipkart bookmarks to the people coming out of the shop. In order to make sure that our targeting was right, we would give bookmarks to only those who were coming out with books in hands; the people who have made purchases.” Over the years, marketing has evolved and Flipkart has taken a more sophisticated approach.
Power of E-commerce Sachin believes that ecommerce has changed the way we live. He says, “Recently when Motorola tied up with Flipkart for the exclusive launch of Moto-G in India, they were launching the product in India before the rest of the world. I would count that as an achievement for ecommerce. This would not have happened if there was not an unparalleled access to customers around India. It took 5 seconds to get over with the whole stock of Xioami Mi3 when the booking was opened for the second time for 20000 phones. This is nothing but the power of ecommerce.” He proudly shares that Flipkart’s delivery boys are almost like Santa Claus for many customers.
Challenges – now and then Sachin spoke about the challenges in the initial days, “One major challenge was to get tie-ups with the major book vendors as we didn’t have an offline book store. The second major challenge was to get the approval for the credit card payment gateway.” Today, Flipkart has almost each and every book vendor/publisher on board and even its own payment gateway, Payzippy. The newer challenges are with respect to maintaining a great customer experience with the massive increase in demand. Supply chain efficiency, talent management and technology innovation surface are the other major challenges.
Drawing parallels Sachin Bansal has always seen Flipkart as an Indian Alibaba rather than an Indian Amazon. Drawing some parallels with China’s Alibaba, he says, “Yahoo had invested the same amount in Alibaba in 2005. It was the inflexion point in China then, exactly where India is today.” He speaks about the possibility of an IPO, “The world is different as compared to 10 years ago. Private investors have more appetite and patience. Also, we’re figuring out stuff about our own business. When we
feel that the market is ready and our business model is not evolving (and stabilized), we will be ready for an IPO.” If nothing, two things can be immediately understood from this comparison: 1. Sachin is eyeing for a similar valuation for Flipkart in the coming years. 2. IPO is uncertain as of now. It might well take more time as the founders seems to be in no hurry (with enough support from current investors).
Opportunity over the years Sachin had stated before that ‘No’ is a very difficult word and more so in our culture where people quickly tend to take offense. But a No which makes your business and customer say YES is worth the while. Sachin has seen a lot of opportunities in Flipkart’s seven years of existence. He sees challenges as opportunities and believes that if we can solve challenges then it automatically becomes opportunity for everyone. “Youngsters want to live their lives on the internet. The future is bright and we are placed right. India can produce a $ 100 billion company in the next five years and we want to be that company. It is going to be one of the most difficult tasks ever done by an Indian company but it’s possible.”
Long term game Flipkart plans to invest most of the raised funds in technology, supply chain and in building a better talent pool. Sachin believes that this helps him think long term. He says, “If you look at big internet companies, they have defined how commerce ecosystem will shape in the future. We are also in the same process. For us the challenges are to take logistics to small towns and villages. Making payments easy for the consumer will also play an important role.” Flipkart’s more than 50% revenue comes from mobile, and mobile has been at the core of Sachin’s plan right from the beginning. He says, “Mobile gives you 10 times data as compared to desktop. People browse more often in mobile, there are sensors like camera, GPS; which are tools giving more information about the user. This helps in providing them with better/more localized experiences.
Blast from the past Here’s an advice from Sachin and Binny Bansal to which both of them resonated in 2010, “Don’t start out alone, it helps to have a co-founder when things are not going your way. You have not done your job well until you find a stranger who is willing to open his/her wallet to give you money for the services/products that you an offering”
CONCLUSION To conclude, this interview gave us a glimpse of how Flipkart, one of the most trusted e-commerce firms in India was founded and what challenges it faced in the initial days. Flipkart co-founder Sachin Bansal shares his vision of the company and how he expects the technology focus to help the firm compete with global players and big Indian business houses venturing online, besides other domestic e-tail rivals. I feel that this topic “Interview with a famous Indian Entrepreneur” will help me learn the foundational skills required of an entrepreneur by knowing what it takes to successfully run a start-up and bring it to the next level. To summarize, this interview with Flipkart co-founder Sachin Bansal covered the following points in detail:
The rise of Flipkart as an e-commerce firm. Initial days of Flipkart. Challenges faced by the company and how they were tackled. Future plans of the company Message to future entrepreneurs.
DISCUSSION After discussing the project with my friends and family members, I received the feedback that the project highlights some of the key skills required as an entrepreneur and as Sachin Bansal runs a very successful business which has transformed the online industry in India which they use them, the interview topic and the report was well-appreciated by my friends and family members. Their opinions regarding the topic were as follows:
The interview topic was well-chosen as it reflects the current trend of growing entrepreneurship in India which is evident from the “Startup India” campaign launched by the Government of India. Flipkart founder Sachin Bansal was an ideal choice for an entrepreneur to interview as he is one of India’s leading businessman today with the necessary knowledge and expertise to run a big corporation and inspire millions of others who wish to emulate him. The project covers all the important factors that played a role in Flipkart’s journey from an online bookseller to one of India’s most valuable e-commerce brand.
MY OPINIONS AND SUGGESTIONS My opinions about the topic of this project is that it gives a good idea about the culture of e-commerce entrepreneurship in India. Flipkart is an apt choice for a case study for the same. While the company has been largely successful in meeting customer expectations, Amazon’s entry into the Indian retail market is now putting pressure on Flipkart to deliver better service and cheaper goods. The American multinational retailer, is expected to bring processes and technology that powered it to become a retailing powerhouse, to India. My suggestions regarding this topic will be that Flipkart, for all its flaws and positives, is not known to do things in half measures. But the launch of e-Kart as a service provider for all e-commerce platforms or the launch and promotion of PayZippy, have been tepid at best, with none of the marketing muscle of Flipkart that we typically see when it comes to the main website. Why these half-hearted, low budget service launches that are totally out of character? All of these in-house capabilities were built over the years to tackle the real problems in the Indian e-commerce ecosystem. But once they achieved a certain scale and maturity, they were robust enough to serve third party ecommerce websites too. So these capabilities were then packaged and productized in order to transform Flipkart from an e-commerce store into a true platform with a finger in all the e-commerce value chain steps – from product search & discovery, listing, payment gateway, warehousing and delivery. While this was a good strategy, it appears that the organization did not account for the rapid pace of growth that they had to keep up to manage customer expectations, the aggressive push by global biggies Amazon and eBay and the full management bandwidth (and more) required for the core business of e-commerce. The market dynamics also made it imperative for Flipkart to acquire Myntra to expand their presence in the lucrative fashion segment and stave off the competition. Further, this diversification was a leaf out of the book of Amazon, which took a similar trajectory of productizing and offering in-house capabilities. But with both the founders now stating that a more apt model for Flipkart’s future journey is China’s Alibaba group and not the US’s Amazon, does it signify a shift in their thinking about the platform play? Given all of these major changes in the past few months, it remains to be seen whether Flipkart will pursue the strategy to be a full-fledged e-commerce platform and enable all value chain steps or let these divisions operate in auto-pilot mode for a few months and focus only on going deep in the core e-commerce services.
REFERENCES The main interview was referred from http://www.letsintern.com/blog/interview-sachin-bansal-flipkart/ The sources and references for other content is as follows:
