The horse race in India’s online retail market is a fascinating show of investor faith. Investors have bet more than $5 billion on the notion that, despite fierce competition, a group of Web retailers will ride the growth in India’s mobile-Internet users and eventually generate big profits.
That group includes Snapdeal, Amazon India and Alibaba-backed Paytm. But in the lead in revenue terms is Flipkart, nearly eight years old, which holds a paper-based valuation of around $15 billion. Flipkart operates like the marketplaces for buyers and sellers that are run by China-based Alibaba Group Holding, a model that has proved more profitable for Alibaba than, say, Amazon’s model.
Flipkart says it hopes to be profitable in two or three years. In the 12 months to March, the company sold about $4 billion worth of goods (including everything from groceries to furniture) but kept only a fraction of that in net revenue. After giving heavy discounts to shoppers and spending big on ads, logistics and warehousing, it is losing money.
Mukesh Bansal, who runs the firm’s commerce platform, must figure out how to juice sales while cutting losses. The Information recently caught up with the 39-year-old Mr. Bansal, who has been hunting for talent in Silicon Valley and recently poached two directors from Google, to chat about Flipkart’s detractors, how to tell the company apart from its rivals and the uproar over “zero rating” of mobile phone data usage.