"That (tech) for us is the biggest solution and everything will evolve around tech," CFO Sanjay Baweja tells ET in an interview. 55-year-old Baweja, a chartered accountant, earlier worked at large corporations including Tata Communications and Bharti Airtel, before he signed up to head finance at the Bengaluru firm.
What are the key investment areas for Flipkart?
Technology makes our processes more scalable and for us, that will be our biggest investment area. We will invest in hiring and invest in our data centre continuously. The other is logistics, where we are focused in increasing our reach and depth since we need to reach a scale where we are able to deliver within the same day. From 15% today we expect third party delivery to go up to more than 30% in 12 months.
Which areas have you focused on to cut costs, since taking charge ?
It's been four months now. There is focus on the payment mechanism. We have been able to manage our working capital better. We have been able to increase our yield of the money we already have in the bank by managing our treasury much better. We invest mostly in fixed income and don't invest in equities.
From a supply-chain perspective, we have trimmed costs. We are not focused on cost reduction, but more on cost optimization. We have been able to renegotiate a few pieces with our telecom partners, coming from a telecom background myself. Every crore is important for us.
What factors led to the organisation restructuring in recent months, including setting up independent units like supply chain and commerce?
The thought of profitability has to be there in every business. We are also looking to continuously reduce our costs. We want to make supply chain and commerce independent for better accountability.
If both remain the same, then there is no ask. So we had to separate them for people to be more accountable and efficient, for leadership to be more accountable. It will pay off. The focus on supply chain, which was not there as much, is now in place.
How do you plan to make logistics and the supply chain more cost efficient?
If you are able to source locally, the overall costs will come down in a big way. That's the solution for us. The focus is to expand the seller base and get local delivery. From an overall perspective, it helps the customer because they don't have to pay more, for us, the cost comes down substantially. I think there is a lot of hope with GST.
There are all these states wanting a share of the pie, especially when they hear that we have done sales in billions. But the tax laws are not that every state will get the money. We would want to work with the government to help them create an environment where we can give back to the community and also help in job creation. I think that's a big focus.
What can Flipkart learn today from Alibaba?
The kind of ecosystem that Alibaba has created in the payment side is something to learn. Payment is something we are trying to solve for ourselves. There is need for a much smoother experience. We are focused on it in-house in a big way.
The other big thing to learn from them is how they have been able to use all the third party logistics players and deliver customer experience. The other big learning is how — because they are slightly because they are slightly profitable — their value is higher than some other older companies that are not as profitable.
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