The Hunt For Growth

How India’s new-age entrepreneurs are grappling with the old-fashioned idea of profitable growth.

- Nirmal John And Tanmoy Goswami

Sachin Bansal doesn’t tweet often. Since opening an account eight years ago, the Flipkart co-founder has tweeted all of 615 times. It usually takes some important company milestone to make him shed his reticence. Or, as was the case on June 1 last year, a pesky naysayer who got under his skin.

That day, Bansal logged in to tear into serial entrepreneur Alok Kejriwal, who at 47 is a senior citizen among yuppie entrepreneurs. On his blog, Kejriwal had laid out “The real reasons why fashion e-com companies are going ‘only app’”. He did not name Flipkart subsidiary Myntra, but it was easy to see through the reference to “a well-known, heavily funded, stratospherically valued brand” that had recently decided to shut its web and mobile sites and go app only.

Kejriwal’s argument: Most fashion e-commerce companies in India lose 50% on each sale. With investors cranking up the heat to stop the losses, what’s a quick fix? “You starve yourself out.” Closing down your sites means fewer customers and lower losses, “and you have not lost face because you proclaim that you are so avant-garde that you are available only via your app!”

Bansal’s response—“One of the most retarded pieces of writing I’ve read in a long time”—triggered an avalanche of tweets. Some chided him for being boorish. Many ridiculed Kejriwal for dreaming up an absurd theory. Why on earth would Myntra, acquired by Flipkart amid much fanfare for Rs 2,000 crore scarcely a year ago, starve its top line to please growth-hungry investors? How does that make sense?