Constant experimentation and thinking big makes Flipkart the poster boy of e-commerce in India As their young startup that has grown manifold in four years, Mekin Maheshwari, the young, energetic President, Engineering at Flipkart held audience spell bound and perhaps mouths wide open, as he effortlessly delivered the workshop on scaling e-commerce businesses. As the e-commerce poster boy, Flipkart, is hungry for more, Mekin reflected the same attitude in bringing an interactive session alive after lunch in esparks, YourStory’s showcase of e-commerce startups in India, the first time ever in the country. Outlining that constant experimentation and technology helped Flipkart find answers to many questions facing them, Mekin provided multiple angles from which to scale a startup, which includes scaling customers, sales, technology, supply chain and service and organization.
In the traditional way, Flipkart also started selling books online as many e-commerce startups have done, for the simple reason that supply chain dynamics and payment cycle suits best. He cited the example of packing and delivering books using picklist-based systems and slowly optimizing to semi-automated sorting, packing and shipping. He delivered the first lesson: don’t start with the optimal way of doing things. Scaling customers involves first finding them and improving conversion rates. The bottleneck in converting customers is online payment systems, which don’t accept a third of payments. This results in losing 30% of hard-earned customers. So Flipkart scaled the cash on delivery system to retain customers. Pricing right is also important.
To scale sales, one method Flipkart bets is on increasing order value per customer by offering the customer more selection and relevant uptakes. Giving reason to come back is very important. The one fix Flipkart has done successfully was building its own delivery in 30 cities after finding that once an item leaves the warehouse, the affiliate courier companies did not deliver to customers. The pilot in Bangalore helped find repeat customers to the extent of 50%. By 2012, more categories will be added to Flipkart.
A misstep that Flipkart took was betting on B2B sales for books. The assumption was that libraries and universities will buy in bulk. It turned out that the bulk buyers would dictate terms and so it quickly turned to scale B2C channel, which has proved to be successful. Scaling technology is also important to cater to growing demand. Mekin asked the entrepreneurs to question “standards” and experiment to optimize technology. Flipkart did not prefer Cloud as it does not give insight into what is happening with sales.
“To scale supply chain, you should control supply chain,” remarked Mekin. Making service reliable and predictable by increasing inventory fulfilment and doing last mile delivery has helped Flipkart. Measuring everything proved to be useful in analysing bottlenecks. Using data to drive supply chain is also very essential.
Hiring right people is the first step in scaling organizations, in Mekin’s view. Hiring right does not solve the problem though but by enabling the employees by providing ownership and letting go helps create enthusiastic and willing people. Building trust is very important. One important mantra at Flipkart is allowing employees to experiment and let them learn from their mistakes.
Thinking Big is very essential to scale ambition. It was a scintillating session marked by high audience participation when Mekin deviated from his presentation to field questions then and there from the audience. The wide array of questions sometimes contained request for numbers, which Mekin politely turned away as confidential.
The lessons will go a long way in helping other entrepreneurs, which can be expanded in Mekin’s own words: “We showed what is possible when none existed before. It is for you to build using Flipkart as a precedent.”
—Venkatesh Krishnamoorthy, chief evangelist