Kalyan Krishnamurthy opens up for the first time on how Big Billion Day started, lessons from Ayn Rand’s Fountainhead and what he strives for.
This is long before Walmart bought a majority stake in Flipkart. It was in early 2014. Kalyan Krishnamurthy, Flipkart’s current CEO, was with the ecommerce giant’s largest investor Tiger Global managing finance of its portfolio companies.
Binny Bansal, Flipkart’s co-founder and then its chief operating officer, was attending a conference in Dubai with Krishnamurthy. There, a European ecommerce company’s CEO (Krishnamurthy has forgotten the name of the company) presented how they had done a huge online sale, which spiked the demand, built their brand, and added a lot of new customers. That is exactly what Big Billion Day (BBD) does for Flipkart every year.
“Binny said “Aisa kuch karo (do something like this)”,” Krishnamurthy remembers. “He took up the challenge. That is how I started thinking of BBD. I came back and told my team that this is what is happening in the world.”
Over time, BBD has evolved as the country’s most successful and largest shopping carnival at the time of Diwali. It forced Amazon and every other online shopping platform to start their own versions of the carnival. Discounts pour in like cats and dogs. And, for Flipkart, it sets the new normal (every year the gross merchandise value of doubles).
In the last five years, a lot has changed.“The country has changed in a big way. Ecommerce has changed, Flipkart has evolved and BBD has evolved,” Krishnamurthy told Moneycontrol.
Those days, ecommerce was negligible; it was just picking up. Investments in ecommerce was a lot less. There were just a handful of big categories like books, mobile phones and accessories and sales were largely driven by discounts. Today, Krishnamurthy said, that a category as complex as fashion is a large category.
“Fashion on ecommerce is not easy. There is fitting, there is size, different sizes for different brands. People are not trying ecommerce, people are adopting ecommerce. The frequency of purchase was two times a year, now the average is six times a year,” he said.
Now, Flipkart has 160 million products listing, adds a lakh every day, offers credit to customers, airs videos on its platform and reaches the deepest corners of the country.
But, this leadership was at stake. It was 2016. Krishnamurthy just joined Flipkart as the head of category design organisation in June. Amazon nudged past Flipkart in July.
“The mandate was very clear: not to lose leadership to Amazon,” said a Flipkart executive, on the condition of anonymity. “There is no market in the world where after losing leadership position to Amazon, a company has been able to win it back.”
Krishnamurthy once again took the lead and BBD was once again the goal post. “During the festive season we had to come out in the top,” the executive said. Positions were given to new people to lead verticals. At the end of the sale, Flipkart cornered 65 percent of the ecommerce market.
Behind the win is how Krishnamurthy prioritises his time. At the top of his list is getting the right people and the right talent.
“To me, that is everything. To me the success of this company in the next five, 10, 15 years will be getting the right people and talent development,” he said.
The other two things are “to make sure that Flipkart has a very strong differentiated customer value proposition” and taking stakeholders along in the growth journey, especially the merchant ecosystem, the kirana ecosystem, and “of course consult with the government”.
But, at the core of all that Krishnamurthy does is “customer value proposition”. For instance, when people inside Flipkart talked about net promoter scores, the metric that measures the loyalty of a firm’s customer relationships, Krishnamurthy said, “not only around BBD, our NPS should be high throughout the year,” another Flipkart executive said on the condition of anonymity.
“All our stakeholders, our customers, and our board members, they expect me to do things right throughout the year, not just for BBD,” Krishnamurthy said. “Today it is about getting the best value to the customer… There is a perception that BBD is about discounts and pricing. It is not about that.”
Krishnamurthy wants to chart a different path from Jeff Bezos’. Amazon is all about service: selection, price, and speed. Flipkart wants to play on value. “We pivoted the company over value versus service, which was a difficult proposition, but we did it,” he said, without commenting on Amazon, or any other competitors.
His conviction to do things comes from a book he read when he was young - Fountainhead by Ayn Rand. “I was influenced in my early days, and even now by that book. Do what you think is right. If you think about what that book is all about, its conviction,” he said.
He is quick to give an example. “(Something) most of our teams believed in but people in the outside did not believe in. We chose value over service. Today we are good at both, but that time we had to choose because of the situation we were in. We chose the customer were service,” said Krishnamurthy.
That also distinguishes Flipkart from Amazon. Over the last few years, Krishnamurthy said, Flipkart had built a unique affordable selection, offering very innovative creative credit and finance schemes to customers, and also is committed to the concept of digital access.
“If you look at how you present the app to the customer it has evolved a lot. We have launched Hindi for the first time, we have launched video, there is huge amount of gamification in ecommerce -- all this was not there when BBD started. It was just about getting deals and pricing,” he said.
For the country’s online buyers, and for Flipkart’s rivals, BBD is the country’s largest shopping festival. But, for Krishnamurthy, it is a way of life.
“We make whatever I said visible every day, and I don’t want it to be there only for 20-30 days. People development and talent development, and being the most preferred employer in the country -- is something we want to be seen doing every day.”
In 2019, BBD is special, even for Krishnamurthy. “We want to be seen as somebody who is increasing access to shopping in this country. That is the biggest thing we want to do, and making products a lot more affordable. It is not about output metrics like GMV and transactions,” he said.
BBD opens up the flood gates for millions of old and new shoppers to experience Flipkart and what it offers. But, for Krishnamurthy, it is showcasing capabilities.“This is not just about BBD, this is how we look at our business. Shopping is not about the top 10 per cent of the country. It is how do we democratise this concept, and take it to 700-800 million people, is the only thing we live for.”Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.