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Flipkart reshuffle signals shift to margins over volume

Jul 4th 2020, 4:50 pm
Posted by nicholhill
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Flipkart reshuffle signals shift to margins over volume

By Sankalp Phartiyal and Shounak Dasgupta

MUMBAI/BENGALURU, Jan 12 (Reuters) - Even before he was appointed to run India's biggest e-commerce company, Kalyan Krishnamurthy had signalled a change: as head of sales at Flipkart he focused on profitable "big ticket" items, a shift away from the industry's fixation on growth at all costs.

That helped turn around the group's revenues after a series of valuation writedowns, and secured the top job for the veteran of Flipkart's largest investor, Tiger Global, in a management shakeup this week.

Krishnamurthy was named CEO on Monday, while co-founder and outgoing CEO Binny Bansal moved into the new role of group head.

"The trigger (for the reshuffle)... was repeated mark-downs in its valuation by the fund units of Morgan Stanley and Fidelity," said one source familiar with investor discussions.

The person said investors, led by Tiger, were getting increasingly edgy as the writedowns not only stung early investors who bought in at higher valuations, http://tvcweb.erjnet.com.br/userinfo.php?uid=670861 but made it harder for Flipkart to tap the market and raise fresh capital.

The company is preparing for an initial public offering, probably in 2018 or 2019.

Flipkart and Tiger Global both declined to comment on the reshuffle and its implications.

Flipkart has seen its lead in the online market in India eaten into by global giant Amazon.

But some company sources credited Krishnamurthy, who joined Flipkart in June to spearhead some of its core sales efforts, with outmanoeuvering Amazon during the festive sales push from October onwards.

No official data for the period are available, but several analysts and company sources said Flipkart clocked higher gross merchandise value (GMV).

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