Despite all the buzz around India's biggest e-commerce company Flipkart's impending acquisition of the troubled Snapdeal, CEO Kalyan Krishnamurthy remained tight-lipped about it in his rare public appearance on Friday.
At TiE’s India Internet Day 2017 in Delhi, he, however, explained that all of Flipkart's acquisitions so far have been capability-driven and cited Myntra, the online apparel seller it bought in 2014 for Rs 2,000 crore (over $340 million then), as an example.
“Myntra was addressing a very different customer segment than us. For a horizontal platform, going deeper into certain segments didn’t make sense. Hence, we acquired Myntra, and it is one of the most successful mergers,” Krishnamurthy said.
“Myntra had a unique customer base than Flipkart, they had more women customers than us. While Myntra made brands affordable for consumers, Flipkart concentrated on styles,” he added.
Krishnamurthy also ruled out an offline foray, saying the company will focus only on online retail since the former required a completely different set of capabilities. "There are 300-350 million Internet users in India, but [the number of] transacting users are very small," he said, hinting at the still-nascent online retail market.
Interestingly, last month, Myntra launched its first offline store in Bangalore, though it seems to be positioning it more as an experience centre than a revenue generator.
In October last year, Mint had reported that Flipkart was mulling launching physical stores in smaller cities to attract more customers. Under a new project that it internally called ‘assisted commerce’, the company was looking to open several brick-and-mortar stores, the paper said.
In January this year, Flipkart underwent a major organisational restructuring in which Kalyan Krishnamurthy, a former Tiger Global executive, was named its new chief executive officer, and co-founder and current CEO Binny Bansal was elevated as group CEO.
Flipkart has already raised $1.5 billion from Tencent, Microsoft and eBay even as merger talks with Snapdeal are fast progressing. However, it will raise a total of $2 billion in the current round, with another $500 million coming from Japanese Internet and telecom conglomerate SoftBank. Those funds are part of the overall merger deal with Snapdeal, two persons with direct knowledge of the discussions had told VCCircle.
Separately, online travel firm MakeMyTrip chairman Deep Kalra said he was fundamentally against protectionism, but he did feel that Indian companies were at a disadvantage in the face of capital dumping into the country's startup ecosystem.
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