Flipkart and Focus 4 - Beware the Whispering Death

The fourth part of my series on Flipkart and its apparent loss of Focus and its battle with Amazon appeared in DNA on April 20th, 2015.

Part 4 – Beware the Whispering Death
Monopolies may have the luxury of getting distracted. If you were a Microsoft in the 1990s, you could force computer manufacturers to pay you a MS-DOS royalty for every computer they sold, irrespective of whether the computer had a Microsoft operating system installed on it or not[1]. You dared not go against Microsoft, because if you did, it could snuff you out – “cut off the oxygen supply[2]”, to put it more evocatively. But if you are a monopoly, you do have to keep one eye on the regulator[3], which distracts you. If you are not a monopoly, you have to keep one eye on the competition (despite what Amazon may keep saying to the contrary, that they “just ignore the competition”[4]).

Flipkart and Focus 3 - There’s Something (Profitable) About Your Privacy

The third in my series on Flipkart and focus appeared in DNA on April 18th, 2015.

Part III – There’s Something (Profitable) About Your Privacy
Why do so many companies hanker after apps? Smartphone apps, tablet apps, iOS apps, Android apps, app-this, app-that….
Leave aside for a moment the techno-pubescent excitement that accompanies the launch of every new technology (if you are not old enough to remember words like “client-server[1]”, then “soa[2]” will surely sound familiar enough). Every Marketing 101 course drills into its students that acquiring a new customer is way costlier than retain an existing. Loyal customers (leaving aside the pejorative connotation the word “loyal” carries, implying that customers who shop elsewhere for a better deal are of dubious moral character) are what you should aspire to – that keep buying from you for a longer period of time[3] – and which allows you to refocus your marketing and advertising dollars towards the acquisition of newer customers, faster. If you spend less on unnecessary discounts and expensive retention schemes then margins from existing customers are automatically higher.

Flipkart and Focus - 2 - Mobile Advertising Numbers Can Be Misleading

The second part of my series of articles on why I believed Flipkart was at losing focus, at the wrong time, when faced with its most serious competition to date. This one focused on why a fascination with mobile advertising numbers could be very misleading.
It was published in DNA on April 14, 2015.

The Numbers Game Can be Very Misleading
According to the Internet Trends report of 2014, mobile internet advertising spend grew 47% year-on-year in 2013 to reach $12.7 billion, or 11% of the total global internet advertising spend. This mobile ad spend number was about 32 per cent of total mobile app revenues of $38 billion. Clearly mobile ad spend has been growing several times faster than non-mobile ad spend.
Facebook, the world’s largest social network, has been stunningly successful in growing its mobile revenues. So much so that “In the final three months of 2014, Facebook served 65% fewer ads than a year earlier, but the average cost of those ads to advertisers was 335% higher.[i]” As much as $2.5 billion in Facebook’s annual revenues came from these mobile ads – shown on smartphones or tablets. So successful has Facebook been in making money from selling these mobile ads that it “launched its in-app mobile ad network” in 2014[ii] to sell ads within other apps,

Flipkart and Focus - 1 - Losing It?

This is the first of a series of articles I wrote for DNA in April on why I believed Flipkart (India's largest online retailer and among the most highly valued startups in the world) was at losing focus, at the wrong time, when faced with its most serious competition to date.

"Why Flipkart seems to be losing focus", appeared in DNA on Sunday, April 12, 2015.

Part I
Among all start-ups that have emerged from India in recent and not-so recent times, Flipkart is likely to be at the top of most people’s minds. The list is admittedly weighted heavily in favour of newer companies, given that the Indian start-up ecosystem has only in the last decade or so started to pick up steam. But that is changing, and the list is getting longer and diverse, with such names as Urban Ladder, Zomato, Reel, Druva Software, WebEngage, etc…[1] in just the online segment. But today, in 2015, Flipkart is the big daddy of them; with total equity funding of US $2.5 billion and a valuation of a whopping US$11 billion as of April 2015, it was ranked the seventh most valuable start-up in the world[2] (though that was still a far cry from the $178 billion market cap enjoyed by US online retailer Amazon[3] and $220 billion market cap of Chinese online retailer Alibaba[4]).

Yet Flipkart seems to be in trouble.

Big changes ahead for India's IT majors

My article on challenges confronting the Indian IT majors was published in DNA in January 2015.

Here is the complete text of the article - Big changes ahead for India's IT majors:

Hidden among the noise surrounding the big three of the Indian IT industry - TCS, Wipro, and Infosys - was a very interesting sliver of signal that points to possibly big changes on the horizon. Though Cognizant should be counted among these biggies - based on its size and revenues - let's focus on these three for the time being.

Statements made by the respective CEOs of Infosys and Wipro, and the actions of TCS, provide hints on how these companies plan on addressing the coming headwinds that the Indian IT industry faces. Make no mistake. These are strong headwinds that threaten to derail the mostly good fairy tale of the Indian IT industry. Whether it is the challenge of continuing to show growth on top of a large base - each of these companies is close to or has exceeded ten billion dollars in annual revenues; protecting margins when everyone seems to be in a race to the bottom; operating overseas in the face of unremitting resistance to outsourcing; or finding ways to do business in light of the multiple disruptions thrust by cloud computing, big data, and the Internet of Things, they cannot continue in a business-as-usual model any longer.

Flipakart's Billion Dollar Sale, And A Few Questions

My article on Flipkart's Billion Dollar Sale and an article that appeared in a business daily on the preparations that went into it was published in  DNA on December 29, 2014.

This is the full text of the article:

An article published on an online news portal (reproduced from a business daily) claimed that "Flipkart's 'Big Billion Day' was planned over more than 700,000 man hours (six months of work put in by 280 people over 14 hours every day) to get the back-end systems ready." This is a stupendous achievement by any yardstick, and all the more creditable given that Flipkart's infrastructure is nothing to scoff at to begin with, and which is rarely known to keel over during traffic surges. Despite all this preparation however, Flipkart didexperience issues during its big sale, which led to its founders issuing a public apology - an act of entrepreneurial humility that was well appreciated by many.

The article states that Flipkart "clocked a gross merchandise value (GMV) of $100 million". But what is "GMV"? According to Investopedia, Gross Merchandise Value, abbreviated as GMV, is "The total value of merchandise sold over a given period of time through a customer to customer exchange site. It is a measure of the growth of the business, or use of the site to sell merchandise owned by others." But there is some confusion as to what GMV actually means. This arises from the fact that GMV is not a standard accounting term. For instance, a search for "GMV" or for "Gross Merchandise Value" on the web site of The Institute of Chartered Accountants of India throws up zero results. GMV's definition differs based on each e-commerce vendor's assumptions. Therefore, if an item's price is marked at Rs 100, and Flipkart sells ten such items for Rs 70 each, is the GMV 700 or Rs 1000? Let us be generous and assume that GMV refers to the total sale value, before discounts - that would make it easier for Flipkart to claim they clocked in a hundred million dollars in GMV. Plus it is the logical thing to do - from a marketing perspective.

Vishal Sikka's Appointment as Infosys CEO

My article in the DNA on Vishal Sikka's appointment as CEO of Infosys was published on June 25, 2014.

This is the full text of the article:


Vishal Sikka's appointment as CEO of Infosys was by far the biggest news event for the Indian technology sector in some time. Sikka was most recently the Chief Technology Officer at the German software giant SAP, where he led the development of HANA - an in-memory analytics appliance that has proven, since its launch in 2010, to be the biggest challenger to Oracle's venerable flagship product, the Oracle Database. With the launch of Oracle Exalytics in 2012 and Oracle Database In-Memory this month, the final chapter and word on that battle between SAP and Oracle remains to be written. Vishal will watch that battle from the sidelines.