Flipkart starts fixing glitches

Flipkart is spending big money on recruiting several senior executives to build a strong leadership team to tackle Amazon. Photo: Bloomberg Bengaluru: India’s largest e-commerce firm Flipkart is strengthening its quality assurance team and considering working with companies that provide cloud-based solutions to handle massive traffic increases on days when it has a sale on. Both are response to glitches during the company’s Big Billion Day sale last month. Separately, at least five senior executives have left the company since September and the company has changed its organizational structure. Flipkart held the Big Billion Day sale on 6 October, offering discounts of up to 90% and selling items for Rs.1 as it sought to expand the e-commerce market and add millions of new users. While customer response surpassed Flipkart’s expectations—it sold goods worth $100 million in less than 10 hours—the company’s site frequently crashed and it was accused of marking up product prices. Flipkart chief executive and co-founder Sachin Bansal was forced to apologize to customers. Flipkart has decided that the company simply hadn’t tested its systems and servers thoroughly enough ahead of the sale, according to two people familiar with the matter. The company is now building a large quality assurance and systems testing team under Srivalli Arkalgud, who was hired from software maker Intuit Inc. two months ago, the people said, speaking on condition of anonymity. This team’s task will specifically be to test the strength and quality of programming code written by Flipkart engineers for the site, the people said. Though Flipkart currently has a testing team, much of this is done by code writers, engineers who specialize in writing programming software rather than testing it, they added. At least two engineers had warned senior executives in Flipkart’s technology team more than three weeks before the sale that the company’s systems weren’t prepared to handle a big increase in traffic, one of the people said. However, the junior engineers were overruled. “There was a lot of enthusiasm to do the event. Talk and preparation started months before so the company wanted to do it come what may. But it was clear to at least some people who were working on the project that Flipkart systems weren’t equipped to handle a big spike in traffic,” the first person added. Flipkart is also considering moving to a cloud storage platform for such special sales, both the people cited above said. The company is working with Google Inc.’s cloud services team to see if it can move its storage management on such days when its servers may not be able to handle increase in traffic, they said. Though a cloud-based service is more expensive, it would enable Flipkart to add capacity according to the increase in traffic on the given day. Flipkart currently works with Netmagic and Dell to manage its servers. “It is completely incorrect that there were warnings that were ignored,” a Flipkart spokesperson said in an email. “We had contingency plans in place for addressing these issues with stress testing to identify the potential failure points. But, as Sachin had mentioned in his email to customers post the billion day sale, the traffic on that day ended up being much higher than what we had anticipated in all scenarios.” Management churn Meanwhile, Flipkart is seeing its biggest management churn in 18 months with as many as five senior executives leaving the company since September, another three people familiar with the matter said. Kalyan Krishnamurthy, senior vice-president, retail; Nipun Mehra, senior director, retail; Suraju Dutta, vice-president, supply chain strategy; Siddharth Das, chief operating officer of Flipkart’s now defunct payment system PayZippy; and Dharmarajan K., senior director, customer service, have all left Flipkart since September, the people cited above said, requesting anonymity. Flipkart, which has raised $1.8 billion from investors, is spending big money on recruiting several senior management executives from bigger, more established companies to build a strong leadership team that can fend off rivals such as Amazon India and help the company maintain its dominant position ahead of a possible initial public offering in 2-3 years. But the departures highlight a challenge for Flipkart that is only going to become tougher over the next few years: retaining older, experienced executives after having paid salaries that are significantly higher than market rates. In the past, Flipkart has had trouble retaining executives it hired from bigger, more established firms. In the first half of last year, Flipkart lost as many seven senior and middle management employees including chief financial officer Karandeep Singh. Flipkart has undertaken an organizational overhaul, promoting board member Mukesh Bansal to the marketing chief position and moving the previous marketing head Ravi Vora to a much smaller role as head of the company’s private brands business, Mint reported last week. The company now has as many as nine senior vice-presidents from four less than two months ago. The senior vice-president layer is the second-most powerful at Flipkart after founders Sachin Bansal and Binny Bansal. “Realigning roles and responsibilities help us keep pace with our aggressive growth and the dynamic environment we operate in. The decisions (of the executives referred to above) to pursue their careers outside Flipkart and move on were personal. Each of them have contributed immensely to building the organization and driven tremendous growth in our business,” the Flipkart spokesperson said in the email.