Sachin had been especially fascinated by Xiaomi; in his eyes, Xiaomi was the ultimate product company. It had become the choice of the Chinese masses because of the excellence of its product design and its technological expertise. Drawing on this melange of sources and trying to adapt it to the realities of the Indian market, Sachin drew up a blueprint to realize his $100 billion dream and achieve profitability at the same time.
It was a plan that necessitated capsizing Flipkart, voluntarily introducing chaos, in the hope that the churn, when over, would produce a far stronger creature – a colossus. Until now, Flipkart had essentially followed the Amazonian principle of pleasing customers at any cost by stocking products at low prices and delivering them quickly. But Sachin and his colleagues came to the conclusion that Flipkart’s inventory-based model of direct buying and selling of products would limit the company’s reach. It had served the company well so far, but to become a behemoth, to take commerce to the masses, the model might prove inadequate. The range of products under such a model would always be narrow, which would circumscribe its expansion. The diversity and size of the Indian retail market called for a more subtle approach. The Flipkart 3.0 team concluded that if the company continued on its current trajectory, it would ‘max out’ at $20 billion in sales. Instead, if Flipkart made itself into a ‘platform’ for all kinds of goods and services, it would become an ‘internet company’ rather than just a retailer. An internet platform is like a bazaar but with a limitless capacity to host vendors and to grow. Alibaba, the Chinese internet giant, was primarily a bazaar. Even Amazon, the world’s largest e-commerce company, had a sizeable marketplace business. The Flipkart council decided that their company would have to build one, too. Strikingly, this is what Kunal Bahl, Sachin’s nemesis-in-waiting, had been saying for years. The platform that Sachin was imagining was, however, significantly different from Snapdeal’s. In Sachin’s view, such a marketplace could only be created at that particular point in time, after Flipkart had helped create an e-commerce ecosystem of suppliers, logistics providers and delivery workers. Without Flipkart’s early efforts, a marketplace could not have delivered the kind of excellent service that Flipkart had come to be known for. But now that this ecosystem was in place, Sachin believed it was an opportune time to withdraw from retail and become a bazaar.
Sachin also argued that such a bazaar could only be realized by a ‘technology’ company, not a retail firm. Hence, decision-making at Flipkart would have to be controlled by the product and engineering teams, and not the sales team. In a sense, history was repeating itself. Sachin’s initiation to the internet business had been with Amazon India, set up as part of Jeff Bezos’ efforts to prove that Amazon was a ‘technology company, not a retailer’.2 Nearly a decade later, Sachin was pursuing the same mission at Flipkart.
Apart from the shiftin its business model, Sachin had decided that Flipkart would have to bring upon itself another upheaval. By now, it was clear that unlike in the US, most people in India would browse the internet on their smartphones rather than on desktop computers. Apart from a few million people who primarily lived in cities, most Indians wouldn’t have the finances, or the need, to purchase computers or laptops. Sachin had spotted this trend early, but despite his constant grumbling, he believed that the company hadn’t done nearly enough to improve its mobile app. By November 2014, Sachin had expanded the Flipkart 3.0 council to include about a dozen members – the people charged with implementing his grand vision. At their meetings, he started promoting the idea that the company should become an app-only platform.
Sachin argued that the way to make Flipkart into a household name was to beautify its main product – the app. The app would have to be made so technologically advanced, so aesthetically pleasing, that new users would be drawn to Flipkart by word of mouth, just like they were to Xiaomi and Apple in their respective countries. This would save Flipkart hundreds of crores in advertising expenses. The app would offer another advantage: customization. As it gathered data on users’ shopping habits, Flipkart would use its technology to analyze the information and display products, matching them with each user’s taste. This is how Flipkart would stay ahead of Amazon and its ilk. Sachin was convinced that this could only be possible if the Flipkart engineers, who had been used to building features for the desktop website, devoted all their energies to the app. And they could only be brought around to his worldview if the desktop website was closed down. He told his colleagues, ‘The world is moving towards the mobile. Customer experience on the app can be made significantly better than the desktop. So, not only do we have to be the leaders, we need to proactively move traffic to mobile. The only way to do that is to remove the crutch of the desktop.’
Another idea that Sachin had devised was the creation of a large advertising platform. By the end of 2014, Flipkart had quietly been earning sizeable advertising revenues. The Indian digital ads market was growing fast, touching nearly $1 billion annually.3 Most of this revenue went to one place: Google. The rest was scattered among thousands of websites. In the space of one year, Flipkart
