Moneycontrol Be a Pro
Get App
Last Updated : Apr 18, 2019 06:53 PM IST | Source: Moneycontrol.com

New CEO could replace Krishnamurthy at Flipkart a year after Walmart's big bang acquisition

US retail giant redrawing strategy ahead of shareholders’ meet in the first week of June

Priyanka Sahay @priyankasahay

A year after global retail giant Walmart bought out Flipkart, a top leadership change seems to be in the offing, with a new chief executive officer (CEO) likely to replace Kalyan Krishnamurthy in the online retailer very soon, sources told Moneycontrol.

A formal announcement on a new CEO to lead Flipkart was expected around Walmart’s shareholders' meeting in the first week of June.

Flipkart, in which Walmart bought 77 percent stake for $16.1 billion in May last year, has seen a string of changes in the top deck of its leadership team.

Close

This includes the sudden exit of its Group CEO and co-founder Binny Bansal, following an independent probe into allegation of personal misconduct.

Walmart is redrawing its strategy after making an elephant-footed entry into India’s exploding e-commerce market that has seen company valuations jump manifold.

Moneycontrol has learnt that as part of a broader strategy Walmart is keen on shifting the focus in Flipkart more towards core business metrics, with improved profitability and greater sales volume.

In the fiscal ended March 31, 2018 Flipkart recorded a gross merchandise value (GMV) of $7.5 billion, effectively meaning that goods worth $7.5 billion were traded through its site involving thousands of sellers and millions of buyers. It recorded net sales of $4.6 billion during the year, representing more than 50 percent growth in both cases.

When contacted, Krishnamurthy denied that he was moving on.

"This is just not true. I am at Flipkart for the long term and fully committed to the company and Walmart-Flipkart partnership. As we called out it’s a baseless story," said Krishnamurthy.

Flipkart also denied that there were any plans to replace Krishnamurthy with a new CEO.

“This is completely baseless. We strongly deny it," said Rajneesh Kumar, senior vice president and chief corporate affairs officer of Flipkart Group commenting on Krishnamurthy's likely exit.

He also stated that during his visit, McMillon commended Krishnamurthy and the entire Flipkart Group leadership for their commitment to India by finding solutions through technology and innovation.

Flipkart will be listed on stock exchanges in the subsequent years, most likely within 2019-20 as a fully-owned Walmart subsidiary, a corporate strategy similar to what it has adopted in Mexico.

The retail giant intends to scale up with plans to create "millions of jobs through supply chains, commercial opportunity and direct employment."

It also plans to support small businesses and the government's 'Make in India' initiative through direct procurement as well as exports. Walmart has said it will partner 'kirana' (neighbourhood grocery stores) owners and members to help modernise their retail practices and adopt digital payment technologies.

Walmart also intends to scale up its sourcing of Indian merchandise and farm products, which, according to the company could result in an increase of an estimated $7 billion in farmer incomes, comparable to a doubling of the incomes of an estimated 6-6.5 million rural households.

The aim is to drive volume rather than focusing purely on the enterprise value.

Doug McMillon, president and CEO of Walmart was in India on April 16 and 17. He is learnt to have interacted with Flipkart's leadership team and the employees on April 16.

 

He also stated that during his visit, McMillon commended Krishnamurthy and the entire Flipkart Group leadership for their commitment to India by finding solutions through technology and innovation.

Krishnamurthy, who is seen as the Tiger Global's man in Flipkart, was roped in as the company's CEO in January 2017, with Binny Bansal vacating the position to move to the role of Group CEO.

Krishnamurthy, a former employee of Tiger Global, also had a previous stint with Flipkart starting 2013. He served the company as its first interim chief financial officer and the categories' head before leaving the organisation in November 2014.

It was Binny Bansal who brought Krishnamurthy back to the company in June 2016. Within six months, Bansal was moved from his position of CEO to Group CEO with Krishnamurthy taking his place.

After Bansal's exit from Flipkart as the Group CEO in November, Krishnamurthy's role expanded with CEOs of group companies such as Myntra's Ananth Narayanan reporting to him. Narayanan, however, have since exited the firm.

(The story has been updated with Kalyan Krishnamurthy's statement)

The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .
First Published on Apr 18, 2019 12:25 pm
Loading...
NULL int(1)
Sections
Follow us on
Available On
PCI DSS Compliant