BENGALURU: Flipkart on Monday announced that Binny Bansal, Chief Operating Officer (COO) and co-founder of Flipkart has taken over as the Chief Executive Officer (CEO) of the e-commerce major. Sachin Bansal, the current CEO and co-founder, has gone on to become the executive chairman of the company.
The development seems to be an effort to fend off the competition being posed by Amazon which has brought in the concept of same day/next day delivery.
Earlier in the day, Sachin tweeted: “Welcome @binnybansal as CEO of @Flipkart. Together we’ll create magic.”
In his role as executive chairman of Flipkart, Sachin will provide strategic direction for Flipkart, mentor the senior leadership of the company and look for new investment opportunities. He will play an active role in championing the Indian e-commerce sector and building the internet ecosystem, and represent the company in external forums, a statement from the company said. Meanwhile, Sachin will continue to be the chairman of the board.
“We believe Flipkart can play a transformational role in improving commerce in India and in improve the quality of lives. We also want to continue to play a pivotal role in shaping the internet and the commerce ecosystem of India,” Sachin said in a statement
Binny as CEO will be responsible for operationally driving the company and will be accountable for Flipkart’s overall performance. All the business areas – Commerce, Ekart and Myntra will now report to Binny. All corporate functions, including human resources, finance, legal, corporate communications and corporate development will also report to Binny.
Commenting on the development, an e-commerce analyst said, “Today, the Indian customer in the metros who are used to same day/next day delivery are finding it difficult to get used to a marketplace model where delivery takes four to ten days. In this scenario, consistent customer experience is primary differentiator for any e-commerce company. Thus, we can see significant invests in operational excellence by the top companies in India.”
The industry perceives Binny as a hands-on guy. “Binny is now all powerful and it had to be so as operations is critical and he is the doer. Meanwhile, Sachin as the strategist can focus on M&As and chart out the company’s strategy,” said the analyst
Binny said, “Today, we are in a very strong leadership position with over 60 per cent share of the m-commerce market, 50 million customers and clear leadership in smartphones and fashion.”
Meanwhile, Mukesh Bansal will continue to be the head of commerce platform, Flipkart’s core business, and will have additional responsibility of the ads business. Mukesh will also continue in his role as chairman of Myntra.
Commenting on the development, Sanjeev Lamba, Partner-Aristotle Consultancy, said, “Such reshuffling is a regular exercise in the corporate world. It’s kind of a promotion for Binny Bansal.”
With Flipkart having good visibility, it now also has an eye on the ads business and that could also be a reason for the reshuffle, said an industry analyst on condition of anonymity.
Meanwhile, another view floating around is that “they are probably looking at a rotational model where all founders get to be the CEO”.