Devaluations triggered Flipkart’s CEO switch; Tiger Global holds the reins to beat Amazon
In the year 2016, Flipkart’s share value wasmarked downmany times by its investors, with last being inDecember. Co-founder Binny Bansal brushed it aside as aninsignificantmatter. Sachin Bansal too didn’t look too concerned about the devaluations.
ButFlipkart’slargest investor Tiger Global was alarmed by the Indian ecommerce giant’s multiple devaluations. This prompted the move to appoint Kalyan Krishnamurthy (former Tiger Global executive) asthe company’s new CEOreplacing Binny Bansal, as perreports.
“The trigger (for the reshuffle)… was repeated mark-downs in its valuation by the fund units of Morgan Stanley and Fidelity.”
A year ago,Binny Bansal had replacedSachin Bansal as Flipkart’s CEO and Sachin had admitted thathe was removedfrom his post due to poor performance. With Krishnamurthy’s appointment, Binny met the same fate.
Tiger Global takes matters into their own hands
The new CEO has earned the tag ofhard taskmasterand is pretty ruthless when it comes to getting rid of anything that’s hampering Flipkart’s growth, be it people or business units. He started focusing on big ticket items instead of draining funds in the name of growth since his entry into the company asBusiness Head in June.
This is a complete opposite ofAmazon’sstrategy for its India business, which is ‘win at all costseven if it results in heavy losses’.
Speaking about the changes implemented by Krishnamurthy, a Flipkart employeesaid,
“He focused the discounts on high demand categories like mobile (phones), TV and large items – washing machines, air conditioners.”
Tiger ready to pounce on Amazon
Flipkartcurrently leadsthe Indian ecommerce market. But gradually the American etailer isclosing the gapand might dethrone the home-grown etailer. Naturally, Flipkart investors are a worried lot these days. However, Tiger Global’s direct involvement in the company’s operations has put other investors at ease.
“Investors are happy with the way the founders have stepped aside and given the control to professionals, as it’s very rare in India,” a sourceaffirmed.
Tiger Global wants to improve Flipkart’s performance before the IPO and nextfunding round. But would Krishnamurthy be able to fight Jeff Bezos’deep pockets?