Friday, 16 November 2018

Jabong Merges Into Myntra, Ananth Narayanan Will Continue To Lead

Myntra CEO will continue to lead
Myntra's independence as a business will be "preserved"
Jabong brand will also be retained
Putting rest to all speculations, Myntra has finally issued its statement in media. According to a company statement, Myntra and Jabong will now fully integrate all the remaining functions including technology, marketing, category, revenue, finance, and creative teams.
“Since Myntra’s purchase of Jabong in mid-2016, the two brands have been steadily integrating key business functions and streamlining processes. This has resulted in revenue growth and a significant improvement in the customer experience,” the company said.
It further added that the closer integration of Myntra and Jabong is a necessary step in the company’s continuing development. By better aligning its resources with the long-term plans, they can put the best structure in place to serve the sellers and brand partners and ultimately benefit the customers.
Myntra also cleared the clouds over the status of the CEO Ananth Narayanan. As per media statements, he will continue to lead the team. “Myntra’s independence as a business will be “preserved”. The Jabong brand will also be retained,” the statement added.
In a statement on Thursday (November 15), Krishnamurthy said he is committed to growing the Myntra business. “The Flipkart group is committed to the success of Myntra and growing the business, now more than ever… We want to empower the Myntra team to continue to operate independently to achieve even greater success.”
Earlier today, media reports quoted sources suggesting potential lay-offs in the Flipkart Group companies including Flipkart, Myntra and Jabong. Some media reports further reported that as the Flipkart founders move out from the company, at least 20 senior executives at Walmart-acquired Flipkart have reportedly floated their resumes to explore job opportunities.
Both Myntra and Jabong have been brought under the control of Flipkart CEO Kalyan Krishnamurthy following cofounder Binny Bansal’s exit as Group CEO earlier this week.

Leads Resign, Flipkart Sr. Executives & Jabong Jobs At Risk

Flipkart Group CEO Binny Bansal resigned last week over a personal misconduct issue raised by Walmart
Following it, Myntra CEO and CFO is also expected to have resigned
Potential lay-offs are further expected at Myntra-Jabong
Post the resignation of Flipkart Group CEO Binny Bansal over a ‘personal misconduct’ issue raised by Walmart, the company has entered into the restructuring mode. While the leads from several departments have already resigned, many senior executives at Flipkart are now looking for a shift.
Also, the employees of Flipkart subsidiaries including Myntra and Jabong are now uncertain of their status and are expecting a potential lay-off.
At present, Kalyan Krishnamurthy is leading Flipkart Group as the new CEO.

Myntra-Jabong

As per media reports, Myntra CEO Ananth Narayanan is speculated to put in his papers. He was followed by CFO Dipanjan Basu.
Chief marketing officer of Myntra and head of Jabong, Gunjan Soni, and Myntra’s chief strategy officer and head of categories, Ananya Tripathi, also quit the company earlier this year.
An ETRetail report further quoted sources stating that Myntra could lay-off around 100 to 400 employees as part of the rejig.
As far as Jabong is concerned, Myntra acquired the company in 2016 and was headed by CEO Ananth Narayanan. Jabong is now expected to lay-off around 50% of its 400 strong workforce. This calls for merger of the several departments of Jabong with Myntra such as technology, HR, finance among others.
Both Myntra and Jabong have been brought under the control of Flipkart CEO Kalyan Krishnamurthy following cofounder Binny Bansal’s exit as Group CEO earlier this week.
As per reports, merger of Myntra and Jabong with Flipkart is also on the cards. However, most probably, Flipkart Fashion and Myntra may continue to be run independently, “although it is not clear how much focus will remain on Jabong and if it will continue operations.”
In a statement on Thursday, Krishnamurthy said he is committed to growing the Myntra business. “The Flipkart group is committed to the success of Myntra and growing the business, now more than ever… We want to empower the Myntra team to continue to operate independently to achieve even greater success.”

Flipkart Headquarters

The things are not smooth at Flipkart headquarters as well.
It was a well known fact that not many senior executives at Flipkart have been the die hard fan of Krishnamurthy. As the Flipkart founders move out from the company (that too in a political fashion), at least 20 senior executives at Walmart-acquired Flipkart have reportedly floated their resumes to explore job opportunities, as per media reports.
As said, the executives fear duplication of roles if Walmart decides to merge Myntra-Jabong with Flipkart and hence looking out for options.
“While Flipkart’s fashion business has been run by close to 100 employees, the same functions at Myntra are run by 1,000 people. Sourcing for all three platforms may be merged while further synergies are being explored,” said a few of the ET sources.
In August this year, when global retail giant Walmart acquired Indian ecommerce unicorn Flipkart for $16 Bn, it was seen as the sign of the maturity Indian startup ecosystem has gained, thereby giving a wonderful exit to the investors in the company. However, the way Walmart has pushed the founders Binny Bansal and Sachin Bansal out of their own company, it has forced the startup ecosystem stakeholders to think once again on their fund raising and exit strategy.
Update: The media reports later confirmed that Ananth Narayanan will continue as CEO of Myntra

Thursday, 15 November 2018

CAIT wants govt to launch e-commerce marketplace in partnership with trade associations

Traders' body CAIT Thursday urged the government to launch an e-commerce marketplace portal in partnership with trade associations where small traders, artisans and women entrepreneurs can sell their products in a 'fair and transparent manner'.
The Confederation of All India Traders (CAIT) said it has also sent a letter to Union Commerce Minister Suresh Prabhu Thursday alleging "that the e-commerce business in India is highly vitiated and has been gripped by a few big online companies who are indulging into predatory pricing, deep discounting and loss funding" against the FDI guidelines of the government.
Representational image. Reuters
Representational image. Reuters
The commerce and industry ministry notifies FDI policies through press notes. Press Note 3, which was released in 2016, enlists guidelines for foreign direct investment in e-commerce sector.


"The government in association with trade associations should launch an e-commerce marketplace portal where small traders, artisans, women entrepreneur and others can sell their products in a fair & transparent manner," CAIT said to Prabhu.
In the letter to Prabhu, the traders' body also demanded early announcement of an e-commerce policy and formation of a Regulatory Authority to monitor the e-commerce business in India.

How Walmart decided to oust an icon of India’s tech industry

Flipkart co-founder and former CEO Binny Bansal. Photo: AFP
Flipkart co-founder and former CEO Binny Bansal. Photo: AFP
Bangalore/New York: For Binny Bansal, the end of his long run as co-founder of India’s most successful startup came Saturday when he began calling colleagues to say he was done. The 37-year-old was stunned that officials from Walmart Inc., his startup’s new owner, were probing details of an affair years earlier. An investigation found no evidence of wrongdoing. Nevertheless, a decade after he created e-commerce leader Flipkart, he was calling to say goodbye.
His ouster, announced Tuesday from Walmart’s hometown of Bentonville, Ark., left workers at Flipkart, half a world away in Bangalore, stunned and struggling to make sense of the cryptic explanation. They worried about Walmart’s motivations and wondered if other Flipkart leaders would exit.
In its announcement, Walmart said it had initiated an independent investigation into an allegation of “serious personal misconduct.” The probe didn’t uncover evidence to support the charge. However, company said, “it did reveal other lapses in judgment, particularly a lack of transparency, related to how Binny responded to the situation. Because of this, we have accepted his decision to resign.”
The explanation satisfied almost no one. Flipkart employees and workers at other startups wondered whether Walmart was using the episode to push Bansal aside. His co-founder left after the deal was completed, and several Flipkart employees saw the timing of his resignation as suspicious. Walmart’s handling of the situation raises more questions than answers, said Kannan Ramaswamy, a professor at the Thunderbird School of Global Management at Arizona State University.
“Like it or not, Bansal is one of the very successful entrepreneurs in the country and India likes to claim such heroes as its own, so I don’t think this issue will disappear,” said Ramaswamy, who specializes in management strategy in the country. “There has to be more information forthcoming.”
Walmart declined to comment for this story and Bansal did not respond to questions.
This account of what led to Bansal’s departure was pieced together from interviews with two dozen people directly involved in the events or associated with the company. It doesn’t answer all the questions swirling around the e-commerce giant long heralded as the leading example of India’s rise. But it clarifies some of the key details that led to the ouster of one of the country’s most celebrated entrepreneurs.
The allegations against Bansal arose just after Flipkart agreed to sell a controlling stake to Walmart, the American retailing giant. The deal came after months of negotiations during which Walmart archrival Amazon.com Inc. pressed hard to win the deal. In May, Walmart agreed to pay $16 billion for a 77 percent stake.
The woman who had been involved with Bansal contacted executives at Walmart in July, as they were working to close the U.S. company’s biggest deal ever. She alleged that Bansal had sexually assaulted her in 2016.
Walmart took the allegations seriously enough that it appointed a global law firm to investigate the charges. The independent probe found that he’d had a consensual, extramarital relationship with the woman and that she was not an employee at the time of their involvement, though she had previously worked at Flipkart, according to people with knowledge of the investigation.
But Walmart’s senior executives still had questions. They wanted Bansal to explain why he hadn’t disclosed the allegations during the signing of the deal, particularly while answering mandatory questions about litigation risk, according to the people. They also wanted to know about alleged payments Bansal had made to the woman, perhaps to encourage her silence, one of the people said.
The co-founder insisted he didn’t have any obligation to disclose the relationship, especially because there was no evidence of assault. He also didn’t think he should have to answer more questions after the investigation. The questioning was particularly galling because Bansal had led formulation of policies for sexual harassment and whistle-blower complaints. Eventually, Bansal announced he’d had enough, the people said.
It’s unusual to hold an executive responsible for relationships outside of the workplace, according to legal experts, but they do have to answer questions honestly.
“I don’t think he had an obligation to report to a new owner a previous intimate relationship,” said Alan Exelrod, an attorney in San Francisco at Rudy, Exelrod, Zieff & Lowe. “The flip side is that if he’s asked and he doesn’t tell the truth, then he’s in trouble.”
The decision most likely turned on executives’ ability to trust Bansal and their desire to avoid a public relations disaster, said David A. Tauster, an associate attorney in Nixon Peabody’s labor and employment practice group.
“You could see how Walmart would read between the lines and think, ‘You know what? The harassment is not the only thing at issue here,’’ Tauster said. “The risks of keeping this executive on are not going to outweigh the benefits of just using this as an opportunity for a somewhat clean break.”
With Flipkart, Walmart has a lot at stake in India’s growing online retail market. The 1.3 billion country’s retail market projected to grow to $1 trillion by 2020. Without a single dominant local retailer and booming mobile internet access rates, Walmart and Amazon are in fierce competition to emerge as the market’s leader. With Bansal’s departure, Kalyan Krishnamurthy, who has led the Flipkart online retail business, will take on additional responsibilities.
Grabbing control of Flipkart has become critical for Walmart, which has also strengthened its own ethics and compliance practices in the wake of a six-year international corruption investigation. The company cultures were completely different in this way, according to people familiar with both firms. At Flipkart, an extramarital affair would be considered personal; Walmart executives thought it was worth disclosing.
In a statement that announced the news internally, Walmart said it had full confidence in the strength and depth of leadership at Flipkart and would support the subsidiary’s “desire to evolve into a publicly-traded company.”
While echoing many of the words in Walmart’s communique, Bansal’s email explicitly described the events as personal. He was stepping away from the operating role but would continue on the Flipkart board and as a large shareholder.
“Thank you for all the goodwill that you’ve shown towards me over the years,” he ended, in an emotional sign off. “I’m grateful to have had the opportunity to help get us to where we are today.

Paytm's Parent Company One97 Communications Widens Net Loss to Rs 1,490.4 Crore

Paytm's parent company One97 Communications has reported a higher net loss of Rs 1,490.4 crore for the year ended on March 31, 2018, compared to Rs 879.6 crore in the previous fiscal, according to regulatory filings.

One97 Communications' revenues from operations, however, grew manifold to Rs 2,987.41 crore in FY2017-18 as against Rs 624.76 crore in FY2016-17, according to the company's filings to the Corporate Affairs Ministry provided by business intelligent platform Tofler.

Its employee benefits expenses during the fiscal under review were at Rs 540 crore.

The filing stated that the company has a number of subsidiaries including Paytm Entertainment, Paytm Money, Mobiquest Mobile Technologies, Little Internet, Xceed IT Solution, Nearbuy India and Acumen Game Entertainment among others.

A separate filing of Paytm E-commerce – which operates as Paytm Mall – showed that Paytm's e-commerce venture had registered a net loss of Rs 1,787,55 crore in FY2017-18 as against a loss of Rs 13.63 crore in the previous financial year.

The entity, which competes against the likes of Flipkart, Amazon, Snapdeal and Shopclues, saw its revenue from operations rising manifold to Rs 744.15 crore in FY2017-18 from Rs 7.16 crore in the previous year.