BENGALURU: In a development that took almost everybody by surprise, India’s biggest e-commerce company, Flipkart, on Monday announced that co-founder Sachin Bansal, who has been the CEO since inception, will now take on the newly-created role of executive chairman while his less prominent co-founder Binny Bansal, who has been the chief operating officer will be the CEO.
The Bansals, who are unrelated, were at IIT-Delhi around the same time and briefly worked together at Amazon before founding the e-commerce firm as an online bookstore back in 2007.
This major restructuring of its top management – the first such in its eight-year history – will see Mukesh Bansal, who came to Flipkart following the latter’s acquisition of Myntra, report to Binny. Mukesh, who was till recently touted as CEO-in waiting of Flipkart, will continue to be chairman of Myntra, which he co-founded, and head Flipkart’s commerce platform. He has been given additional responsibility of the overall ads business. The current ads business head Ravi Garikipati will report to Mukesh. Flipkart acquired Myntra in a $330-million deal in May 2014.
The timing of the restructuring – Flipkart is facing intense competition from Amazon even as there is talk of a public listing in the US in the near term – has triggered speculation as to whether more should be read into it. Flipkart said the restructuring was designed to give its strategic objectives a sharper edge and help it become a world-class internet company.
Subrata Mitra, partner at Accel Partners, a prominent early investor in Flipkart, said some of these changes had been under consideration for a while, and were primarily intended to remove overlaps in areas of responsibilities among the senior leadership.
An official spokesman of the company vehemently dismissed reports of any conflict at the top, or that Binny was on a different page on certain issues. These reports seemed to suggest that he’d grown unhappy with the company’s ‘execution’ capabilities, especially that it was no longer outpacing competition.
The spokesman described as “false, malicious and completely baseless” speculation that Binny and his long-time aide and Flipkart chief business officer Ankit Nagori had been planning to start a new venture in the logistics space and had begun talks with investors. “This ‘information’ seems to be the handiwork of a person with malevolent intent and a highly overactive imagination,” the spokesman added.
Others, too, discounted reports of differences among the Bansals. “At a time when Amazon is snapping at their heels, it is unlikely that the founders of a $15-billion company will let egos come in the way,” said a person who was associated with Flipkart earlier and who has worked with Sachin and Binny. “They are very good friends,” he added.
Neither Sachin nor Binny were reachable. Emails sent to them asking for comments on the restructuring remained unanswered.
Binny as CEO will be responsible for operations and overall performance. All business areas, including commerce, logistics arm Ekart, fashion subsidiary Myntra and new businesses, will report to him. All corporate functions, including human resources, finance, legal, corporate communications and corporate development, will also report to him.
In his new role, Sachin will focus on Flipkart’s strategic directions, mentor senior leadership and look for new investment opportunities. “We believe that Flipkart can play a transformational role in improving commerce in India and improve the quality of lives of millions of people across the farthest corners of the country. In this next phase of the journey, it will be our endeavour to fulfil this responsibility and prove that India can produce a world class internet company that can outshine any global behemoth…It will be my objective to dramatically step up Flipkart’s leadership role among key external stakeholders,” Sachin said.
Abhishek Goyal, founder of startup tracking firm Tracxn, who was part of VC firm Accel Partners when it first invested in Flipkart, said the changes were desirable. “Sachin is going to focus on diversification outside the e-retail business, more like what Chinese messaging platform WeChat did. They have a very large consumer base and they clearly have a large set of services to offer to consumers. There have been some early signs of that through Flyte, Wallet, etc,” he said.