As Walmart Inc announced its acquisition of Flipkart for a whopping $16 billion dollars, financial pundits have attributed the success of this mammoth deal to one man – Kalyan Krishnamurthy.
Who Is Kalyan Krishnamurthy?
After completing his MBAs from the Asian Institute of Management in the Philippines as well as from the University of Illinois at Urbana, Champaign, Krishnamurthy led the finance supply chain at Procter and Gamble (P&G). He then moved to e-Bay where he spent seven years heading their Asia finance operations division.
In 2011, he joined Tiger Global as the finance director before joining Flipkart as their interim chief financial officer in 2013. Four years later, Krishnamurthy became the chief executive officer of Flipkart.
Changing Flipkart’s Game
In January 2017, when Krishnamurthy took on new responsibilities as the CEO, the homegrown start-up was already facing headwinds. The company’s valuation was on a steady decline and fundraising became a herculean task. To add to it, Amazon was bolstering its way into the Indian retail e-commerce space.
Krishnamurthy, a former hedge-fund manager took matters into his hands. Not one to shy away from taking the aggressive approach, he fired senior managers and set bold and audacious sales targets while boosting spending on promotions. He left no stone unturned in his bid to turn around Flipkart’s fortunes, starting with dominating the Indian festival season shopping.
The man is credited with what is called the “80-20 rule” – he streamlined digital traffic, and focused on the 20 percent of categories that raked in 80 percent of Flipkart’s revenue.
Krishnamurthy worked on the idea of changing the way the world looked at Flipkart – from Amazon’s poor cousin to the homegrown aggregator that understands the pulse of 1.3 billion people!
The deal between Walmart and Flipkart is a testimony that his strategy worked for the company, making it an attractive investment roughly valued at $21 billion.
The Road Ahead
Since Walmart buying the stake in Flipkart is the one of the biggest deals ever by a foreign buyer, there is a lot of anxiety over the road ahead for Flipkart.
According to BloombergQuint, following the deal, Kalyan Krishnamurthy will continue to remain CEO of Flipkart, while Sachin Bansal, co-founder of the company has moved out. ETtech also reported that Binny Bansal, who co-founded the company along with Sachin Bansal, will take over as executive chairman while retaining his role as group CEO.
Walmart CEO Doug McMillon announced that the investment would help pave the way for India in providing good quality goods at competitive prices, while also creating job opportunities for farmers, suppliers and women entrepreneurs.
According to Money Control, Krishnamurthy addressed the concerns of sellers and customers alike, in an email announcing the buyout.
"Flipkart will continue to be a marketplace where sellers from around the country can connect with customers. We will keep making deep investments in technology, innovation, supply chain and business processes to grow the e-commerce market even more in coming years, with the aim to increase the number of people shopping online, and the average spends. Further, Flipkart and Walmart will maintain distinct brands and operating structures post this investment," Krishnamurthy wrote to sellers in a mail.
As Walmart’s entry into the Indian online retail space sets the stage for many more high profile acquisitions and business war against the US retailer’s major rival Amazon, one can only hope that India stands to get the lion’s share of benefits from it.
(With inputs from BloombergQuint)
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