‘Execution on scale’, for Deep Kalra, Chairman and Group CEO, MakeMyTrip, the fact that some of the established companies in India are achieving this very well is an indicator that the e-commerce sector will continue to be ‘hot’ in India. Speaking at the inaugural BW Businessworld Golden Cart Summit in Delhi, Kalra pointed out, “The sector has grown in triple digits, and some very good companies have come up and developed fast.”
One can argue that some of this growth may have come from access to capital but the industry has its share of examples, where some companies, despite the capital, have not been able to grow to a place, where they are dealing in tens of thousands of transactions on a daily basis. “It is very easy to spend money on the likes of marketing instead of focusing on executing on scale. Execution on scale can only happen when you have a solid grasp on tech, automation and have a great platform,” Kalra said, adding, “I am a big fan of executing at scale and we need to give credit to companies that have been able to do it.”
Kalra admitted that in the year ahead, it would be tough to raise capital for the industry at large but two ends of the spectrum will manage. First, large companies, that despite being marked down are still sitting on significant valuation. Second, early stage companies, as despite the sober sentiment, there is no dearth of angel money.
“That chasm has grown wide however. Idea and proof of concept is getting some monies in but revenue and sustained revenue growth is becoming critical as people have not thought through all issues at hand,” Mr Kalra said.
The Tough RoadKalra was in conversation with Annurag Batra, Chairman & Editor-in-Chief, BW Businessworld. Replying to Batra’s query on the role of an angel investor that Kalra is known to have explored, the latter confessed that was an area that he had “yet not cracked”. “I went down the path and realised much later that it was not sustainable. I recently read an article on investors frowning on angels turning investors, and I understand it. I don’t have any regrets – some of the ventures I invested in did very well as well but I was not being honest to myself. It was herd mentality and I did not want to do it. Eventually, I found an angel fund and told them to represent me,” Kalra informed.
He explained that the best mentoring can be done when there is no investment because there is then no bias. But that is the worst kind of investor from a startup viewpoint. In investing, the right balance must be struck.
He pointed out the importance of the right people when it comes to investment decisions. “The best companies have pivoted or changed course at some point. Look at Snapdeal. They were a coupon company, a deal site and then became a market place virtually overnight,” he said.
Nimble and HumbleKalra advised companies to be nimble and humble, and to accept the fact that they can be wrong. He encouraged young e-commerce players to take advice from everyone, and reiterated that some of the e-commerce entrepreneurs in India of companies such as Flipkart and Ola are people who can compete with the best in the world.
Delving into corporate warfare tactics where at times brands have acquired competing brands for various reasons, he advised against the ‘what if’ cycle. “The likes of Facebook, Google and Microsoft have done various acquisitions sometimes just to take competition off from the picture. But the ‘what if’ scenario is not healthy for anyone – it has killed many people and companies,” he said.
He spoke about the ethos he followed while making investing decisions, and the focus that MakeMyTrip has done in its product and its mobile offer for its own growth.
Mobile & PaymentsIn his conversation with Batra, Kalra also singled out innovations on mobile and payment structures as the big leap. Another area where he expects Indian entrepreneurs to learn their lessons from is on the design aspect. “In most areas, Indian entrepreneurs compete aggressively with their global counterparts. But design appreciation, which eventually is about a better product experience, is still in its infancy in India. That is a reason why Uber was not born here. That beings said we have PayTM, Rivigo and Grofers here that I see as gamechangers,” Mr Kalra stated.
Understand your ConsumerOne question that haunts many Indian business leaders is why India has not given a worldclass product and services company yet. There are examples like Indigo and other services but the industry is changing, where it is reaching critical mass and some changes will be seen on this front.
“In many India is having it hard, at least in comparison to markets like China. China had protection. Baidu could not have happened if others were allowed. Then there is language barrier and protectionism. This does not take away from the fact that companies such as Alibaba and Tencent have had amazing vision. India has had it tough – sometimes we argue with regulatory bodies to at least create a level playing field as Indian companies are unable to do a few things that foreign brands can. But that should bring out the best in us,” Kalra concluded.
