Just days before Mukesh Bansal officially announced he was leaving Flipkart to take a break and move on to his next venture, he interacted with young entrepreneurs who had sent in their questions for him through a Twitter contest run by Kalaari Capital ahead of the Kstart launch event in Bangalore last Friday. His answers were crisp, giving the young entrepreneurs the insights they were looking for from someone who has been through the entire experience of setting up a company, pivoting, scaling, getting acquired and then taking the brand to even greater heights. Here are some key excerpts.
AI-based disruption will define the future of fashion in ecommerce
While admitting that there was still a gap in the online vs offline shopping experience, Mukesh stated that eventually, online would be able to deliver a better experience than it does now. “You'll be able to visualize a product on you, get style tips, and you'll get interactive advice from a stylist which may eventually be automated, AI-based. Fashion is one industry that is still to be disrupted by technology in a very big way, because it's complex and aesthetics-based. But I feel technology is getting there; in the next 5-7 years there will be some massive disruption.”
The facts back it up, given that at Flipkart, “almost 50% of transactions are from fashion and lifestyle”. “From the days when we wondered whether people would buy, it seems that now the only thing they are buying (online) is fashion,” he quipped. “The buying experience is still not the same, but technology will help bridge that gap.”
Myntra: The genesis and the future of the brand he created
Many already know that Myntra evolved from a personalization service. “The inspiration in the late 2000s was that the world would move towards getting anything custom made. It turned out to be an idea ahead of its time.” He and his team wanted to build something that would scale and would create an impact nationwide. The personalization was good, but it wouldn't have scaled beyond a certain point. “With that clarity, it was a matter of what we should to pivot into, not if we should pivot,” he explained.
Visiting a mall one weekday afternoon in 2010, Mukesh was struck by the large stores, full of merchandise and staff, yet devoid of customers. “I felt that if all this stuff was available online, people could for it from anywhere, even their office. That eventually led to the creation of Myntra.”
“It took us a year but we arrived at fashion as the eventual business model after doing a lot of background work, we did our homework, so it was not that difficult to convince people. And in the previous four years, we had put basic systems, processes and consumer understanding in place to be able to move very fast,” he recalled.
In India, is it really easier to sell a product than it is to sell a service?
Mukesh was clear that selling anything depended on the market for it and depended significantly on the overall economic development of the country and the cultural mindset. He cited educational services as an example: “Regardless of how much people make, they will save up for their kids' education; they will go out of their way to pay if they feel a service is right for them.”
He added that as more people had greater access to information and a better income and if they could get the right services, ones designed from the ground up for Indians, the market would expand. “The recent launch of Netflix is a great example,” he said, adding that people only had to figure out the value proposition, and that the freemium model worked well, where you pay only for differentiated services.
Does e-commerce have a future without discounts?
Mukesh promptly countered that question by saying that e-commerce is supposed to create discounts for the consumer: “E-commerce eliminates middlemen, brings economies of scale; that's what you pass on to consumers as discounts, so discounts will always remain. That doesn't mean the discounted model cannot be profitable. Around the world there are plenty of discounted businesses which are profitable. It's just a matter of time before we see that in India.”
Of business models, selling Myntra and the lowest moments in his entrepreneurial journey
Answering a question on the inventory model vs the marketplace model, Mukesh stated: “There is no fundamentally right or wrong model; you have to understand the category you're in, what is the supply structure, and pick the right model. Myntra is mostly inventory-driven whereas Flipkart is more hybrid. We pick the business model based on the category.”
Selling Myntra, he said, was based on the realization that “together we could be a formidable and strategic player in the Indian e-commerce market with a massive lead over other players. We had a lot of complementary strengths. We had great chemistry with the Flipkart co-founders. Myntra has grown considerably in the last two years, and is the leader in its vertical. The acquisition helped Flipkart fashion to take off; Myntra was able to benefit from all the scale Flipkart had. It was a synergistic merger.”
But before the high, there were lows – a six-month period in 2013 that Mukesh described as the lowest point in his entrepreneurial journey. “The rupee went to 70 and nobody wanted to invest in India. That cycle coincided with Myntra pretty much running out of cash. We knocked on every door, somehow managed to scrape through. What allowed us to continue was the conviction that we were a strong company with a strong foundation and a good value proposition. And also the patience to wait it out for the long term. We had good support from our investors. So it was never a question of whether we should give up or continue. The entrepreneurial journey requires long-term conviction.”
Failures, he said, always shape you more than your successes because “every failure forces you to introspect and draw some lessons”.
If not Myntra, then what?
Nobody knew it at the time, but this was a question that probably struck a chord. He gave nothing away even when the participants asked him which sectors he felt were more exciting. The response came in his usual calm and placid style: “I think education is one sector that can have massively high impact. AI is another which will have huge disruption in pretty much every field you can think of. It's something we are looking at very closely at Flipkart, but even outside, anything expert-based will get automated and get better over time. Healthcare too,” he said, but added that almost every sector in India had potential for massive scale.
We'll just have to wait for a little while longer before we know what Mukesh Bansal plans to do next.
(Disclaimer: Kalaari Capital is an investor in YourStory.)