Thursday, November 25, 2010

An Interview with Tapas from Flipkart

Regular readers know reading is one of my favorite things to do, so it's no surprise that I'm a big fan of Flipkart, who have made buying books cheaper and easier than it's ever been. Tapas Rudrapatna was kind enough to answer some questions I had about Flipkart. Here we go.

Your CNBC Young Turks segment says you expect a turnover of Rs 100 crore by 2011. Now that a few months have passed since that projection: how likely do you think you are to meet that target?

I don't know the numbers, but we may be ahead of schedule!

You're the leading online bookstore in India with a 50% market share (same source as above). Who is the competition? Anything you admire about any of them, or anything they do better than you?

Landmark and Crossword, of course. They've been in the business longer than we have and hence probably have some understanding that we don't. You also have Indiaplaza, Rediff, Infibeam ... but all of them tackle a variety of verticals or are marketplaces. I personally think it's very commendable to be able to manage logistics across categories, from flowers to phones to perishables like cakes and mangoes!

Most of these have been around longer than we have, so probably have sufficient "trust" branding. We're getting there, no doubt ... but more people will question Flipkart's credibility than that of an established physical bookstore. That being said, the major book suppliers and distributors have told us that we are a bigger buyer than any of them are, so guess we're doing a few things but doing them right. If Twitter's any indication, many seem to have switched from the big names to us as well. All very heartening.

One book per minute. That's a lot of books. How many have you sold so far?

Hahhaa, well, one book a minute was a while back. We're a lot more now ... also given that our catalog/inventory has increased to around 7 Million books. The actual numbers I don't have, but even if I did I probably wouldn't disclose. Any easy way to hack together a figure is this: $7 million in sales as of March 2010. [The post originally said $9 million, but Tapas wrote in to tell me that was a typo.] The average cost of a book is around $8. Divide and voilĂ .

I know you're big on customer service. What's the biggest mistake you can remember and how did you deal with it?

Biggest mistake, I'm not too sure ... simply because we consider every mistake "big"; chain only strong as weakest link ... so to speak. Also, I don't think we really have any "big" mistakes in our line of work ... we have many little ones. And these small ones continue to happen, just because the system has so many moving parts and variables. Payment Gateway failures mean customers are unable to place orders, we ship someone a wrong book, books get damaged in transit, and so on.

In the past 2 weeks [yes, I'm getting to this a little late -- Unmana] for example, we had a payment issue because the Ayodhya verdict meant an SMS ban was imposed. Banks use SMS to alert customers of debits, so online payments got disabled. Soon after, the CWG meant that heavy motor vehicles/goods transportation had certain restrictions imposed. Delhi being the hub for the Indian book industry (and Delhi-NCR accounting for perhaps 20% of our customer base), it was and still is a logistical nightmare for us!

I think the main role of customer service is in proactive capacity (as opposed to reactive). It's one thing to effectively solve a problem when reported to you, but to pre-emptively alert a customer goes a long way in setting the right expectations. That's where we can be most effective.

Almost all books on your portal carry attractive discounts. How do you manage that, on top of free shipping?

We get asked this a lot.

Essentially, we have none of the overheads that traditional retail has. No high rent store in a mall, for one. Big savings. We also have "unlimited shelf space". We can display 7 Million titles online and effectively stock and ship them, because a website has no display limitation. And of course, warehouses don't need to be pretty. They are optimised for storage, not display.

We get between 40% and 60% margin from suppliers ... the bulk of which we pass on to the end user (while remaining profitable ourselves). Win-Win for all!

Who actually gets to handle the books?

Handle the books, you mean physically? We have a packing and shipping team of course, along with Inventory Management.

I'm presently in Calcutta, actually .. we've just set up a new Operations Center here (been up and running for a couple of weeks now). I sat and packed books. Sujeet (our VP - Operations was here, and he sat and packed books as well). It's always been like this ... it's how we learned our business. Sachin (CEO) and Binny (COO) sat and packed books for the better part of a year, as have all of us who've been here 2 years or more.

It's the only way to understand ground reality, and to spot bottlenecks and ways to make the system efficient. And of course, no one in Flipkart asks someone else to do anything they wouldn't themselves!

Is it a perk of your job that you get to read new books before you ship them off?

Not a perk, it's a popular misconception! In theory, yes ... we can get our hands on the book before anyone else does. In practice, we're all tied up with other things, juggling too many balls. Very often, we get to read a book much later than our customers ... because we tend to exhaust our stock the moment new books get to the warehouse.

Even the one copy I take for myself will mean one customer has to wait an extra day to get his copy. Not acceptable to us.

Funnily, I can tell you what has happened once or twice. I have always been fond of books and have a ton of them lying around. I also happened to be living in the Flipkart office for around 6-8 months last year (not as a figure of speech, I was actually living there .. towels, toiletries and all). At some point, people wouldn't know which books were mine and which were Flipkart's ... and I'd come around one evening and see one of my books was getting shipped.

Glad I stopped them in time! And on other occasions, I have sent a couple of people my own personal copy (after asking them first!)

How did you get the word out when you first got started? How has your marketing changed since then?

Word-of-Mouth, because we couldn't afford any other! Good publicity as a result of Good service is self-propagating.

How has it changed? Not much, still word-of-mouth.

I guess we've now have time to be active on Twitter and Facebook, but that's pretty much it.

Who develops your marketing strategy? 

Primarily Sachin. 

Binny, Mekin (VP-Technology) and a bunch of us all provide inputs.

Primarily, Customer Focus. It seems like something Captain Obvious might say, but it's an easy component to overlook, unintentionally. Even technologically; developers are probably the most in a vacuum ... in that they don't directly interact with customers or books or suppliers. But every little change impacts the end user in a big way. Impact in that regard is another value we look for. The same can be said for Customer Support as well, because they impact customers directly. Selflessness is also what we look for. Again, given that we "reverse engineer" from the customer's point of view, we need people who'll volunteer for tasks at hand, even if it's "not their job" or if they have a lot on their plate. And everyone does it (without being told, in as many words as I just have). Communication and Honesty are also implicit traits. By nature, we aren't an organisation that witch-hunts, probably because we've learned by making mistakes. It's not mistakes that worry us, it's cover-ups and not owning up. This also holds true in terms of giving feedback, either to your bosses/peers or about a particular strategy or piece of technology employed by Flipkart. Most of all, we don't want anybody in an "I told you so" position. And lastly, Innovation. Sure, it's a misunderstood buzzword ... but a lot of problems we solve at Flipkart are by innovation, and most of it is under the hood. It's not brilliant or stunning, but it's innovative in the given context. 

How has the launch of music and movies fared so far?

Fairly well. We've just scratched the surface though, so too soon to tell. Ask me in 6 months, because 20/20 hindsight is everything around here! 

After books, movies and music: what's next? Other countries? E-books? 

Well, missed Mobiles ... did you? Was launched around April, and some people seem to think we're the No. 1 [online] retailer for phones (assuming White market, with bill and warranty). Too soon to tell. 

E-books has yet too witness any traction in India, but it's on the cards. Electronics as well ... the indication we get is that consumers are looking for an online entity that has established credibility. Think we're on the right track, in that case.

What do you want to ask Tapas? Write to me at unmanaswords at with the subject "Flipkart Interview".


Aneela Z said...

Unmana, these guys are GOOD. I emailed Parul, how its possible to ask someone getting on a flight the a day after and they can order and get the book in time to catch the flight! Maan gaye!!!!!

mad hatter said...

wow, thanks so much! i liked reading this and i *very-much* liked the understated-ness that marked the responses.

a lot of people around me are talking about and ordering from flipkart. mighty good stuff too. im ordering soon..

- suparna

Unmana said...

Aneela: That's a great anecdote!

mad hatter: Yes, me too. They seem to be a really smart and exciting company, and I'm sure there are bigger things ahead for them!

L1L2 said...

yess... we heart flipkart too! enjoyed the interview:)

Sue said...

I'm a big fan of Flipkart too. Thanks for the interview.

Perakath said...

Flipkart rocks (especially its packaging and delivery speed) but I've consistently found Indiaplaza cheaper by 50-60 bucks (on MRP ~450).

Unmana said...

Perakath: Thanks, I didn't know that. I'll try them out.