E-commerce major Flipkart’s big bang management reshuffle on Monday, which saw co-founder and CEO Sachin Bansal relinquishing his role to install another co-founder and COO, Binny Bansal, in his place, appears intended to keep the house together.
According to sources privy to the latest developments, giving the all-important CEO’s role to Binny Bansal has ensured that both the investors as well as the original team are pacified by the new arrangement. The country’s largest e-commerce company is currently valued at $15 billion and has so far raised $3.15 billion in 12 rounds from 16 investors.
Mukesh Bansal has been given the additional role of heading the ads business and continues as head of Commerce Platform, a core function at Flipkart, and as Chairman of Myntra, which he founded and was later acquired by Flipkart.
These changes have ensured that investors as well as the 33,000-strong employee base will get to see Binny Bansal coming out of the shadow of Sachin and steer the company at a time when global rival Amazon is giving stiff competition. As CEO, Binny will be responsible for operationally driving the company and be accountable for Flipkart’s overall performance. All the business areas — Commerce, Ekart and Myntra — will now report to Binny. He will also oversee all corporate functions, including human resources, finance, legal, corporate communications and corporate development.
“The management has made the right move and made Binny the CEO. However, a CEO’s position is an external-facing role, which requires one to have tremendous energy, vision, and the power to articulate it to all stakeholders of the company, including the media and investors, very succinctly,” said another source.
These developments come at a time when Flipkart is facing challenges from Amazon and Snapdeal. Amazon beat Flipkart last October when the site attracted the largest number of visitors in India, and is steadily eating into Flipkart’s Tier 1 customer base in the major metros. The next bastion of growth for e-commerce majors is to sell to customers in Tier 2, 3 and 4 towns, a segment of consumers which is largely dominated by Snapdeal.