Sachin Bansal, the co-founder and executive chairman of India’s biggest online retailer Flipkart along with Bhavish Aggarwal, co-founder of homegrown taxi aggregator Ola Cabs called for implementing protectionist measures against their global rivals Amazon and Uber. During a panel discussion at Carnegie India Global Technology Summit in Bengaluru, Mr. Bansal said that India needed to do what China did 15 years ago. “They told the world, ‘we need your capital but we don’t need your companies.’” He also said that local trade unions and politicians are way more demanding towards Indian firms than towards multinational companies. In an interview on the sidelines of the event, Mr. Bansal said that he was not being protectionist but there is a need of creating a level-playing field for the local ecosystem. Edited excerpts:
Q. Has e-commerce reached an inflection point?
In some categories, almost 20-30 per cent sales are happening online, like smartphones. There are categories like home and groceries where it is very small yet. So, I think there is a long way to go. E-commerce is still less than two per cent of the overall retail in India. I think there is huge room to grow.
Q. How successful has Flipkart been in cracking the e-commerce market compared to Amazon?
We have been pioneers in this space and we continue to innovate. We have been constantly focusing on bringing in innovations in the space.
Q. But you have not been able to reach rural India yet?
I would agree with that. I think there are a lot of opportunities there. Logistics is still expensive as well as the reach of the Internet in rural India is still limited compared to cities where almost everybody has a smartphone now. As the internet reaches those places, those markets would come online as well.
Q. Referring to your firm, Amazon said rivals find it shameful selling products unique to India, any comment on that?
The comment was specifically for the ‘Big Billion Day’ and ‘Diwali’ sales. Some of our competition took low-value items and sold them during Diwali sale and tried to claim numbers which were pretty big. And even after that, we were bigger than the competition.
Q. So, are you ahead of Amazon?
Absolutely. We don’t think about the competition on a day-to-day basis. But what we do is that we think about customers. All our efforts are towards making sure that we are the first choice for the customers. As long as we are good in doing that, I believe market share would take care of itself.
Q. You said that government should give preferential treatment to Indian companies, isn’t that being protectionist?
No, it is not. I think it is about creating a level-playing field, where the impact of unreasonable capital is reduced in the ecosystem. I think it is more about creating a level-playing field for the local ecosystem.
Q. Flipkart’s valuation has been cut down by Morgan Stanley again; are you concerned?
We have always maintained that this is a theoretical exercise that happens in isolation without access to data. The valuation is set when a real transaction happens and not based on excel sheet analysis.
Q. What would be the impact of demonetisation on Flipkart?
I think what demonetization has done is that it has accelerated the digitisation of the economy. It has reduced cash usage and hopefully when the dust settles down, the amount of cash usage in the country should have come down and the digital payment and electronic payment methods should have increased as a percentage. About 98 per cent of India’s transactions are happening in cash. Hopefully, that number would be closer to 90 percent or even lower than that. If that happens, and we believe that would happen, you will see this is a huge success for us.
Q. What are the innovation bets you are making?
Innovation-wise, we are thinking about more and more use of AI (artificial intelligence) and robotics in our processes and systems. We are also innovating constantly on the mobile app side of things. With bad Internet connections and low-end phones, how do we make sure that the apps become more powerful?
Q. Do you think there is an e-commerce bubble in the country?
Absolutely not. I think there is still a long way to go and these are still early days.