Nearly seven years after they co-founded Flipkart, back then an online book seller, operating out of a two-room apartment in Bangalore, the proud Bansals announced their latest milestone. The third in this year, they announced that they've raised $1 billion from investors. Following the announcement, the duo told Deepa Kurup that profitability and IPO are long-term goals, that the government must take a wider view on FDI in e-commerce and that domestic players have a better advantage in this game. Edited excerpts from the interview:
You've always desisted talking about profitability, you've said it's a distant priority. With a comfortable cash situation now, is it back on the near-term agenda?
Binny Bansal: We have 22 million registered users, and almost similar number of customers. The way we look at it, when this figure reaches 100 million, we'll be in a position to think of profitability. When we have delivered products to one in three homes in India, we'll get to that point.
Sachin Bansal: Actually, we can turn on the profitability today, we're not doing small numbers. It's about what's the right time. It is important to time your revenue flow; if you look at any Internet company in the world everyone went for a long time frame for profitability whether it is Google, Facebook or Alibaba. We have limited bandwidth, and we want to use it to grow carefully at a fast pace. The ecosystem is evolving fast. As Binny said, 12 months back, 5 per cent of our orders were mobile, today it is 50 per cent. So we have to keep up, and our investors are confident we are going to be profitable someday.
You've just raised $1 billion, quick on the heels of another major round. What is your road map on spending this money?
Sachin: We don't have any specifics right now; we didn't go into this round with any specific plans either. Overall, we are looking at how commerce happens at India, how do people transact, what they want to buy or sell. We're looking at what it means when the commerce ecosystem of India comes online, what are the problems and how can these be solved.
Why did Flipkart oppose FDI in ecommerce?
Sachin: It is a misunderstanding that we oppose FDI in e-commerce. Our stand is that the government is in the best position to decide on the economy.
Our only ask is that the government should make this decision based not on what is good for one or two companies, but based on what is best in general for the country. They should accommodate the larger views on this issue.
Is your real competition from domestic players such as Snapdeal or global heavyweight Amazon? Whose growth story is making you most uncomfortable?
We are not worried about competition. But I'd say domestic players are better positioned as they are more local in their approach. International competition appears to think that they have already won. If you talk to people like eBay, for example, they'll tell you that they are leading and so on. We are not commenting on that, but I'd say none of them are making us uncomfortable now.
You mentioned investing in solving problems. How are you trying tosolve payments?
We are still trying to see what we can do; PayZippy is the first step in that direction. The regulatory environment in India for payments is very restrictive, so it's hard to do much. I hope with time things will get easier.
We've been asking regulators constantly that if your idea is that overall cash usage in the economy should come down, in line with what the government wants, then you have to allow for easier mobile payments. We have made some propositions to the government. We're keen on this space.
Is the IPO not on the cards?
We are not looking at IPO for now. But yes, in the long-term.
