Flipkart has got a new CEO again! Founder Binny Bansal who had replaced co-founder Sachin Bansal as CEO last year has been replaced by Kalyan Krishnamuthy as CEO. Sachin Bansal was replaced by Binny Bansal only to be made an Executive Chairman at Flipkart and now Binny Bansal has been made the Group CEO, another position that has been created to accommodate him in Flipkart.
What this portends to is that the founders of Flipkart have very little control over the day to day management at Flipkart and are now investors in the company rather than executives who run the company.
Kalyan Krishnamurthy, who was heading the Category Design Organization, shall be the new CEO and will be responsible for the day to day operations and the profitability of the company. Kalyan was earlier an employee at Flipkart who moved to Tiger Global, the largest investor in Flipkart and moved back to Flipkart recently. It was said that Kalyan was brought on board to slowly take control over from the founders as the investors were not happy about the way the e-commerce major was being run.
Also, there will be no other changes that shall be done at Flipkart. Sameer Nigam would continue as the CEO of PhonePe and Ananth Narayan would continue to head Myntra-Jabongg. Flipkart, Myntr-Jabongg and PhonePe will ultimately report to Binny Bansal, the Group CEO.
Flipkart has been valued at over $15 billion, but is many many years away from profitability. It has been a cash guzzler that hasn’t show a path towards profitability and financial stability. Many people have questioned its business model as Amazon has entered the country and has rapidly caught up with Flipkart and is now running neck and neck with it. Amazon has been able to gain a lot of market share in a short period of time.
Another major concern is the war chest that Amazon has. Amazon is a successful business in the United States and in many places in the World. This gives it a lot of cash that is needed to win in the hyper competitive e-commerce market.