Flipkart was undoubtedly operating in a make-believe technology utopia. In the advertising business, executives spent many weeks working on complex mathematical equations, not to solve business problems but just to distil the performance of the unit into two or three metrics that could be presented to Sachin, on the basis of which he would determine the health of the business and make decisions. It seemed that the Flipkart CEO considered the traditional ways of running a business too backward and unbecoming of himself.
In 2015, Flipkart was both the zeitgeist and a product of its times. It wasn’t just Flipkart, engineers at all internet startups had entered their own, self-contained tech utopias. The eighteen months starting from early 2014 was truly an epoch for Indian startups. More capital went into startups in that period than what all Indian internet startups combined had received in the preceding decade.9 Earlier, if things went well, an investment would be completed within a few months. But in this period, deals were struck in a matter of days. One venture capitalist, Niren Shah, recalls how he was informed, as he was on his way to a scheduled meeting with an entrepreneur, that he would no longer be needed – the entrepreneur had already signed an investment deal minutes before, and within minutes. At a startup conference in 2015, a budding entrepreneur told a journalist that his startup would launch a product that would ‘kill’ Uber and Ola. Not satisfied with demolishing these transportation companies, he said, ‘in confidence’, that he was also working on a new search engine that would vanquish Google within two years.10
IN AUGUST 2015, the Economic Times published an interview with Snapdeal CEO Kunal Bahl. Snapdeal was on a high at the time. It had just received $500 million in capital from Alibaba, Foxconn and SoftBank, in addition to the $850 million it had raised from SoftBank and other investment firms in the previous year. Kunal made a startling claim in the interview: Snapdeal would overtake Flipkart by March 2016. He added that Myntra’s app-only move had helped Snapdeal expand its fashion business. He mocked Sachin, calling his move ‘the most consumer-unfriendly idea’ he had ever heard.11
Flipkart executives were furious. They had always considered Snapdeal a pest, not to be taken too seriously, but an irritant nevertheless. But this was too much. A few days later, Mukesh Bansal responded. Flipkart would sell goods worth $10 billion in 2015–16, and ‘nobody will be even half of that’.12
The hyperbole was indicative of how intense the rivalry between Flipkart and Snapdeal had become after their mega funding rounds of 2014. The two companies were desperate to be seen as the top dog in e-commerce. But they weren’t just battling each other. Amazon had made quiet inroads into the minds that mattered most – of shoppers.
Amazon India had set up shop in June 2013, but its expansion had been slow. When Flipkart decided to cut its books budget, Kalyan Krishnamurthy and Binny had been of the opinion that Amazon would not gain much even if they got monopoly of books sales online. It would not be able to cause Flipkart serious damage. The books market was small, less than half a per cent of the overall retail market. It was of no significance, they had concluded. Soon, it became clear that they had made a strategic blunder.
Until late 2014, Amazon had failed to topple Flipkart in any major category. But after being handed the books market on a platter, Amazon had replaced Flipkart as the largest seller of books in the country by the middle of the year. The triumph in books, along with the concurrent victories in laptops and electronic accessories, strengthened Amazon’s belief in its India strategy, energized its executives and spurred the company to move faster. It provided Amazon the ideal launchpad from where it could eventually stake its claim to market leadership. By the end of 2015, Amazon had come a long way towards becoming a full-fledged retailer, offering – apart from books – fashion, smartphones, tablets and other products. While Flipkart had wasted many months splitting hairs about whether it was a technology company or a retailer, Amazon had been consumed with attracting and retaining customers, learning the nuances of the Indian retail market and introducing innovations to adapt to it.
Amazon’s India head Amit Agarwal was earning his nickname of Jeff Bot. Every week, Amit and his leadership team would gather in a room at the company’s headquarters in Bengaluru to discuss the previous week’s performance. The meeting would start off with a customer call. It usually got ugly. People could be seen ‘bristling, recoiling in their chairs because the customer [was] going on and on’ about how Amazon had disappointed them. The call would set the tone for the meeting. Amit himself
