Wednesday 25 September 2019

No slump, growth’s the talk of the town: Kalyan Krishnamurthy

Both private enterprises and the government must increase manifold their investments in R& Kalyan Krishnamurthy, CEO, Flipkart
Both private enterprises and the government must increase manifold their investments in R& Kalyan Krishnamurthy, CEO, Flipkart
BENGALURU: Consumption is growing in markets beyond the bigger cities and Flipkart has not witnessed any perceptible sign of a slowdown before the crucial festive season sales, Kalyan Krishnamurthy, Flipkart Group’s CEO said in an interview with ET.

“We are a value player. For us, a great deal of consumption appetite is coming from Tier-2 and Tier-3 markets. In fact, close to 70% of our transactions are from smaller towns and these markets are growing at about 90%,” he said.

According to Krishnamurthy, the metro business is growing at half that rate. Last week, ET reported that consumer spending on online shopping sites fell by about a fifth in the first half of the year compared to last year, according to market research firm Kantar, as etailers cut discounts and the growth slump hit buying sentiment across sectors.

“It is no longer about the top 10-20% (income group), it is heavily about the mid 40-50% and what their needs are,” Krishnamurthy said.

“We are becoming an overall engagement and consumer internet platform with a focus on increasing affordable selection, expanding our portfolio of financial constructs and products to drive engagement like video, feeds, games and gamification,” Krishnamurthy said.

This year, Flipkart is aiming to clock sales worth $3 billion during the month-long festive sales period by focusing on core categories — smartphones, electronics and its top-selling brands across other segments.

To build a selection of affordable products that appeal to the masses, Flipkart works closely with original equipment manufacturers (OEMs) and brands on product features and designs. “We help them remove some of their specifications and get it 25% cheaper for customers’ because that’s what they are looking for,” Krishnamurthy said.

He, however, insisted that is was different from pricing. “Getting affordable selection is a huge part of our business, not to be confused with pricing,” he added.

Affordability is Flipkart’s new mantra. “More than 16-17% of our business goes through some kind of a financing construct,” he said. One of them is the trade-in programme where customers exchange a new product with a used one. “We refurbish it. Our marketplace sellers sell it on 2Gud.”

Close to 55 million customers will have access to credit this year on Flipkart, of which 80% will be first time shoppers.

Flipkart, he said, is also trying to be the ecosystem that sellers and brands depend on to grow their own customer base. This time, Krishnamurthy also explained that he did not want the flagship sale to be about discounts anymore. “I think there was a perception that (the sale) was all about discounts. We moved away from discounts around four years ago,” he said. “It’s now about affordable selection and enabling sellers and the kirana ecosystem.”

“Flipkart has become a part of brands’ go-to-market strategy for several brands and new products of these brands,” he said.

“If an appliance brand has to launch a new line of product in India, it will work with us for eight months, and launch on Big Billion Day so that it can see the reception of the product.”

Krishnamurthy added that Flipkart’s big sale served as a blueprint to help brands plan their offline strategy. In a bid to tap new online shoppers who mostly reside in smaller towns and cities, Flipkart has launched a slew of marketing campaigns to generate buzz, including roping in celebrities like Virat Kohli, Amitabh Bachchan, Badshah and Alia Bhatt, as well as brands like Burger King and SpiceJet to drive marketing campaigns.

Flipkart plans to launch special products during the flagship Big Billion Days sales and run contests throughout the sale period to keep customers engaged.

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