If Flipkart was going to lose to Amazon, it wouldn’t be for lack of agility.
AS SOON AS Kalyan returned to Flipkart, Sachin Bansal’s internal alarms went into overdrive. After he had relinquished the CEO position, Sachin, as Executive Chairman, had been kept on the margins of Flipkart, like a pariah. He had spent his time conducting management reviews, which had turned into rather meaningless obligations for Flipkart executives who knew that Sachin had no say in the running of Flipkart. But the moment Kalyan came back, Sachin jumped into action, trying to reassert his authority. He tracked Kalyan’s moves obsessively, worried about the growing influence of his former subordinate.
A new power dynamic had developed at the company. It wasn’t just Binny and Kalyan wrangling for power, or even Sachin, who was the keenest to contain the Tiger cub. In a matter of months, Nitin Seth had become the most powerful leader at Flipkart, after Binny. In fact, all three top leaders – Binny, Kalyan, Sachin – leaned heavily on Nitin to make their way. Kalyan, because he needed Nitin to get around the bureaucracy and escape interference by the Bansals; Binny, who banked on Nitin to keep Kalyan in check; and Sachin, who not only wanted to contain Kalyan but also make himself relevant again. Initially, Nitin tried to make the best of his role as the go-between. He even attempted to bring the three of them together. He believed that all three had major strengths which, if harnessed, would yield miraculous results for Flipkart. Sachin possessed technological prowess and an instinctive ability to think big, Binny was skilled in implementing sound processes and was determined to build a self-sustaining firm, and Kalyan was a dynamic leader with an instinctive grasp of sales and finance – all powers combined, these leaders would make a formidable team.
But it was a forlorn initiative, destined to fail, as Kalyan and Sachin’s visceral dislike of each other was insurmountable. They rarely exchanged words and when they did, the cracks in their relationship instantly became clear. At one senior-level meeting, Sachin excitedly described a small-town store visit and listed some of the missing pieces in Flipkart’s offering to customers.
In a scathing tone, Kalyan responded, ‘Achha, toh ab aap ko samajh aa gaya consumer ko kya chahiye, e-commerce kaise chalta hai?’ So now you’ve understood what consumers want and how e-commerce works?10
There could only be one winner in this battle. And the improving sales numbers had only bolstered Kalyan’s position. Nitin’s relationship with Kalyan was also becoming stronger. The two would meet many times every day over chai. They would speak over the phone first thing in the morning and before turning in at night. Nitin was highly impressed with Kalyan’s purposefulness and passion. He saw him as a propulsive force that could repel Amazon’s onslaught – to him, Kalyan was very much the man of the hour.
Nitin persuaded Binny to expand Kalyan’s role in August 2016. The ludicrous title, Head – Category Design Management, was rendered completely meaningless. Kalyan was given charge of the company’s marketplace, retail and advertising businesses. The functions of marketing, private label, customer experience and product would all be formally overseen by him. On paper, the Tiger Global representative reported to Binny; in truth, his boss was Lee.
Binny, keenly aware of this dynamic, still sought to restrain Kalyan. Around the time Kalyan was promoted, Binny complained to the Flipkart board that Kalyan’s overly aggressive manner was putting off too many employees and eroding the management’s team spirit. In a concession to Binny, the Flipkart board chastened Kalyan, but he continued to operate without any real fetters.
WHILE FLIPKART’S SALES numbers had begun rising again, Amazon’s advance hadn’t halted. Indeed, in July 2016, it overtook Flipkart in monthly sales for the first time ever.11 At the end of the month, Amazon launched the famed Prime membership service in more than 100 cities, offering one-day and two-day delivery on lakhs of products for a fixed annual price of ₹499. Prime had made the company indispensable to millions of customers in its home market of North America. Amazon executives had no doubt that it would do the same here. In August, Amazon once again outsold Flipkart.12 Amit Agarwal was riding high. A decisive victory over Flipkart, which could be sealed by winning the upcoming Diwali sale, would be the highlight of his career. After being wallopped in China by Alibaba and others, to become the largest e-commerce firm in India in just three years would be no small feat. There was little doubt that Amazon had achieved the momentum to do so.
It was up to Flipkart to prove that it had the strength and the will to turn the tide. This was a crucial period for the company and for the startup ecosystem in India. Flipkart was too big, too symbolically important, it had consumed too much capital – a lot depended on its success. If it failed, investor confidence in Indian startups would be destroyed – if Flipkart couldn’t make it, what hope did the others have? Its failure would be the Indian equivalent of the Lehman Brothers bankruptcy, or as if India’s Goldman Sachs had collapsed.
The stage was set for the most important battle in the short history of India’s startup ecosystem.
IN SEPTEMBER 2016, Flipkart released the Big Billion Days dates: the sale would go live in the first week of October. Like last year, it would be held across five days, with the big categories such as smartphones, electronic appliances and fashion all being assigned different dates to accommodate the expected surge in traffic. Amazon’s rival sale event, The Great Indian Festival, was also scheduled for the same week. It would be a direct, head-to-head contest.
In 2014, when Kalyan had overseen the first Big Billion Day, he had come up short despite extensive preparations. Flipkart’s systems had collapsed under the weight of the traffic. This time, its arrangements would be far more thorough. The company had given
