The famous Amazonian pursuit of pleasing customers was working out well, especially in the urban areas, where much of online retail was concentrated. In the metros, Amazon’s low prices and fast delivery times were winning over an increasing number of shoppers. It was outspending Flipkart and Snapdeal in every area of e-commerce and assembling a product assortment so vast that customers could spend their lives shopping on the platform. Amazon was also occupying massive warehouses every other month, relentlessly expanding its logistics network.
AS THE MONTHS went by, Sachin’s impatience grew. Flipkart had still not moved decisively towards shutting the website, and its marketplace shiftwasn’t happening fast enough for his liking. In September 2015, Sachin issued instructions to remove discounts and other incentives from the desktop site – these would be offered only on its app. He went a step further in October, when Flipkart held its second Big Billion Days sale. It would be a five-day event this time. Sachin had laid down the law to his colleagues and customers: the sale would be held only on the app. Shoppers who went to the Flipkart website were prodded to turn to their apps or install it if they hadn’t already. Sachin wasn’t just preparing for the mobile-only era, he was trying to hasten its arrival by making a concerted effort to shiftshoppers onto the mobile.
Unlike the first Big Billion Day sale, this time it went off without incident. It was held during the middle of October, a few weeks before Diwali. The preparations had been thorough. The technology infrastructure was overhauled. Demand was rationed by assigning one day each to key product categories such as smartphones, electrical appliances and fashion. As with the inaugural sale, Flipkart employees once again worked through nights in the week leading up to Big Billion Days. During the five-day event, Flipkart even stationed an ambulance14 outside its office, to ferry exhausted workers to nearby hospitals if required. Flipkart had some of the best-paid engineers in the country, working in luxurious, air-conditioned offices stocked with energy bars, food and Red Bulls. No effort would be spared to ensure their upkeep at this juncture; Flipkart was a company with a conscience.
Despite the extensive preparations, Flipkart fell slightly short of its revenue target. It was clear that restricting the sale to the app had caused the deficiency. Still, the Flipkart team was in a celebratory mood: at least the sale had been carried out without major glitches. The company organized a party for all its employees at the end of October. Ayushmann Khurrana, actor and television host, was the host of the party. The singer Vishal Dadlani performed with his band. The headlining act was by film star Akshay Kumar, who entertained several thousand Flipkart employees with a dance routine. It was an extravagant affair – the company had spent more than $1 million on a party that celebrated a sale event just because it had gone off without blunders. It was a measure of how much Flipkart had changed.
Though the decision to restrict the sale to the app had limited Flipkart’s reach, Sachin’s conviction about the app-only idea hadn’t wavered. For him, such fleeting pain was but a trifle. He had his eyes on the far more important objective of establishing absolute dominance in the next big thing – shopping on the mobile. He pointed out to his colleagues the surge in app usage in the past ten months. The number of app downloads had jumped to nearly fifty million from ten million since the end of 2014. Sachin insisted that Flipkart push ahead with its app-only drive. In the weeks after Big Billion Days, Flipkart continued to hold app-only sale events, posting higher prices on products on its website.
But by the end of October 2015, Flipkart’s management team had begun rebelling against Sachin’s push to close the desktop site. Even Punit expressed opposition to it. After website discounts were halted in September, Flipkart had been deprived of hundreds of millions of dollars in sales. For the second month running, sales targets had been missed – the shortfall roughly amounted to the drop in demand on the desktop website. It wasn’t making sense. Flipkart leaders also told Sachin that the company should maintain its retail business and suspend the expansion of the marketplace until it had improved its technology tools and learnt how to run a marketplace platform efficiently. There was enough evidence that the company was suffering badly from the radical shifts it had effected.
Towards the end of the year, Sachin’s obsession with going app-only met with its first real backlash from the outside world. Flipkart’s largest smartphone supplier, Xiaomi, informed the company that it would no longer work exclusively with Flipkart. It was keen on expanding its retail presence. In private, Xiaomi executives told their Flipkart associates that the exclusivity arrangement was no longer satisfactory. Flipkart had lost its status as the preponderant e-commerce brand. Its service had become unreliable and inconsistent, and its app-only rhetoric made little sense to brands or to shoppers. On the other hand, Amazon, the legendary international e-commerce champion, was the rising power in India. Its user numbers and sales were expanding much faster than Flipkart’s. It was clear to Xiaomi, the most sought-after brand in e-commerce, whose future was brighter. And to sweeten the deal, Amazon was offering more lucrative terms than Flipkart. It was a no-brainer: Xiaomi decided it would now supply its latest phone models to Amazon instead of Flipkart.
In December 2015, the worrying pattern – a slowdown in Flipkart’s sales growth – that had developed over the past three months, endured. In fact, nearly all the important business metrics showed an alarming decline. New users
