An Interview with Sachin Bansal, ex of Amazon India and now CEO of FlipKart.com

Flipkart.com – Read India Read !

While E-commerce in India has a long way to go before it can catch up with some of the western countries, it is surely growing by leaps and bounds. Leading bookstores like Landmark and Crossword have enabled buying books online, thereby catering to a very large market.


A relatively new player in the bookselling space in India, is flipkart.com. Flipkart was founded on 5th September, 2007 by two ambitious and talented young men, Sachin Bansal and Binny Bansal. Both of them are Computer Science graduates from the prestigious Indian Institute of Technology, Delhi, and love what they do with a tremendous passion. Having worked in Amazon India, their love for books coupled with their desire to start on their own soon took concrete shape as they quit and started flipkart.com in 2007. Having started with 50,000 titles, now the number of titles that are available has doubled. What has struck me the most about flipkart.com, is their fantastic service, in terms of delivery time. I have received books a couple of days ahead of schedule, even. Their range of books is also quite commendable.

Having interacted with a couple of members from the flipkart team, here’s an interview: (Inputs from Sachin Bansal, CEO and Co-founder, Flipkart)

What are the challenges you face as a purely online 24*7 bookstore?

[Flipkart team] Initially when we started out, it wasn’t easy for us to earn the trust of the customer. Our quality of customer service, coupled with the fact that books could be bought at a low transaction size, helped us get trials and gain the trust of customers.

Handling customer complaints, without having a ‘face’ to our customer service proves to be bit of a challenge at times. Not having the ‘display’ advantage, the ‘browsing’ feature and not being able to carry out promotional activities are some other obvious challenges.
The discomfort of paying by cards, on account of security fears is another challenge. We have now tried to address that by introducing the ‘cash-on-delivery’ option.

The fact that highest number of orders and sales get registered during weekends proves to be tough at times for logistics and customer service. The fact that we have to work 24 / 7 and the customer perceptions around it also bring some difficulty (For example, the customer places an order at 12 am and counts the number of hours for delivery right from then!)
In spite of al these challenges (however big or small) we still enjoy and prefer working on the online model because of all its plus points.
Do you think people take one more seriously when one is a bookstore with a physical presence, and then launches into the online business as opposed to a model like yours? (In terms of apprehensions, concerns)

No, it is quite different as we feel that across the world and across business categories, the leaders in the online and offline segments are different. And the largest name in the e-commerce segment, Amazon.com, is an example of this. Customers also view the online business differently from that of the offline business. Therefore there is no advantage for an online store to have an offline presence.

In fact, being a leading offline player can prove to have some disadvantages as people could perceive them as not having expertise in the online model. What is required to run an offline business successfully is very different from what is required to run an online business successfully, whether it is a book store or any other category.

One of the many positive things we keep hearing about Flipkart, is the fantastic range of books that you source. What challenges do you face when you need source books from different countries?

International distributors are far more transparent and easier to work with than Indian distributors. The Indian ecosystem is only beginning to mature and may take time to reach international standards. Yet, our effort is to constantly reach new international distributors so we can provide what our customers desire.

Being a bunch of booklovers, it must be exciting to be in the bookselling business. How do you decide what to stock ?
We love books as much as our customers. We stock what they want to read.

Now you have come up with Cash on Delivery in a reasonable number of cities for a start. What kind of response do you foresee to that?

‘Cash on Delivery’ is expected to be the game changer as customers on Flipkart.com can now place orders online and make payments by cash against delivery of books. Flipkart expects the ‘Cash on Delivery’ option to drastically broaden the customer base – addressing low penetration of Cards (Credit and Debit) in the country especially among important customer segments like students. This move will now make it possible for anyone with an internet access to shop online for books; adding entirely new sets of customers. Those who do not have access to facilities like credit cards and net banking, but are book buyers will now be able to buy books online. The Cash on Delivery facility is currently available in 29 cities (tier-1 cities and metros), and will shortly be extended to tier-2 and tier-3 cities as well. Sales through the ‘Cash on Delivery’ mode are expected to surpass sales from online payment options like credit and debit cards, net banking, etc. in the next 3-4 months.

Another thing that people love about you (I have personally experienced this myself) is the promptness of delivery, no matter what book you’re ordering and from which city. Tell us more about what goes into making this happen so consistently.

The process involved in delivery on Flipkart entails the following steps – Once the order is placed online – the book is taken off our online inventory (In case of unavailability – it will be purchased from a supplier, the book then gets immediately packed and couriered on the same day.) Flipkart currently has tie ups with around 12 courier service providers. We also use Indian Postal services to reach areas without courier providers.

The discounts that you give are very tempting, and enough to lure one into losing one’s self control while buying books J is this sustainable in the long run? How would you say you set yourself apart from bigger stores that have an online wing as well, e.g. Landmark?
You are right that people feel less guilty about spending on books. We hope to continue to provide our customers with the best prices they can find in anywhere in the market.

What would you say was the inspiration to start Flipkart in the first place?

The thought of setting up Flipkart.com came from the less than satisfactory quality of service provided by e-commerce companies in general and online book stores in particular. Our business opportunity was to do better than everyone else in terms of ‘service’. As a start-up company with ambitions in the e-commerce domain, it also helped that this was a segment where we could get started quickly.

Could you give us an insight into the kind of workforce that you have? All techies?
Yes, we are a technology heavy company but need a sizeable workforce to smoothly run our operations which include book procurement and fulfillment. We have about 40 engineers at our headquarters in Bangalore and looking to hire quality talent that match our standards.

Being in the bookselling business, what kind of impact do you think the Kindle, iPad and their cousins are going to have on the reading community? Do you think it will get more people to read?

Products like the Kindle, the I-pad and cell phone book readers are challenging the way in which the world has read books till now. While some analysts say that people will increasingly move towards these products as they allow a reader to have his whole library on his finger tips and also allow them to multitask, we still believe that even today, for many, the romance of owning a real book goes well beyond reading them. Any bibliophile can tell you that.

From a business perspective also, the diffusion of I-pads and Kindles into the mainstream Indian households does not looks easy for the time being. The reason is the prohibitive cost of obtaining these devices. A basic I-pad costs around $500 i.e. around Rs. 23000. The price saga does not end here. You will also have to pay for every book that you purchase for your I-pad or Kindle. The average price of an e-book is expected to be around $10 to $12 i.e. around Rs. 450, which again is pretty high. Although Apple and Amazon are trying to reduce the prices of the E-books, the onus lies on the publishers to pass on the significant savings in publishing and logistics to the consumers. The fate of the book will be decided by the speedily developing South Asia and more prominently, India with its 333 million young readers. This is the ultimate battle between the traditional and the modern.

How will these gadgets impact booksellers and publishers? Also, will you guys consider expanding your horizon to cover e-books in the future?
Technology (both software and hardware) is changing the publishing landscape internationally. When the cost of publishing a book tends to zero, it begins to look like the newsprint industry where writing is not limited to a select few. Anyone with a good story and reasonable writing skills can launch a book at no cost. At some point, books will begin to look like applications linking to websites, photos, blogs, articles, etc. that will make the reading experience more complete.

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our gratitude goes out to Sachin Bansal for doing this interview