Flipkart, the largest E-Commerce firm India has seen, seems to have hit a rocky shore with most of its top executives exiting throughout this year. February witnessed the resignation of Head of Commerce and Advertising Business Mukesh Bansal and Chief Business Officer Ankit Nagori. Later in April, Flipkart’s Chief Product Officer Punit Soni and Vice-President and Head of seller ecosystem Manish Maheshwari resigned. In July, Flipkart lost two more senior executives when Payment Product Head Lalit Sarna and Product Lead for Marketplace Division Sunil Gopinath, followed by the resignation of Legal Head Rajinder Sharma. The latest blow came amidst the festive season when it was announced on Tuesday (25th October, 2016) that the Chief Financial Officer Sanjay Baweja has quit the company. Search for a replacement is afoot and Baweja will continue to work till December 31.
The reasons why Baweja (who joined 2 years ago) resigned are unknown as of yet but one can only speculate based on the reasons for the previous resignations and a few other developments within the company. Some of the speculations are –
- Did Baweja quit for better offers? Nagori quit the firm to start a venture in the sports domain where Flipkart co-founders Sachin and Binny Bansal are the first investors. Manish Maheshwari resigned from the company to join Web18. Based on these resignations, it can be assumed that maybe Baweja too received a better offer somewhere else.
- Did the random resignations influence Baweja? Being company insiders, Baweja and the other executives who quit might be aware of certain negative developments within the company which the consumers are unaware of.
- Did the change in the top management structure not sit well with Baweja? It is well-known that in August, the top management structure of Flipkart was changed and this wasn’t the first time Flipkart saw such a major change. Two key business units went under the control of Kalyan Krishnamurthy. It may be assumed that there were internal frictions between the executives which led to the resignation.
However, let’s wait to find out the real reason behind the resignation.
The effect of Baweja’s resignation will not be a pretty one. Flipkart has been enduring blow after blow and the foundations of the structure will begin to crumble soon. Here’s why the effect of the resignation will be negative –
- Festive Season – Flipkart has already started their Big Diwali sale and the festive season will continue till Christmas. This is the time for the highest revenue collection and profit. Baweja’s resignation will only lower the morale of the employees at this point and underperformance at this point can be fatal.
- Loss of an Experienced Leader – Baweja had 19 years of experience in the field of corporate finance. Loss of such an experienced and talented CFO will reflect in the company’s financial ventures and that would not be desirable; and considering the timing of his exit, it is definitely not desirable.
- The GST Juncture – Baweja’s exit has coincided with the Governments biggest tax reforms of the century – GST. There are a lot of paperwork to be done at this time in every e-commerce industry considering the changes in taxing structures. A resignation by the CFO at this point will prove to be very difficult indeed.
- The Walmart Collaboration – There have been talks of Flipkart, India’s biggest e-commerce firm, collaborating with Walmart, USA’s biggest multinational e-commerce company. Such collaborations are almost impossible without the assistance of the CFO and Baweja’s exit before any finalization will be proof of it.
- Rival E-Commerce Firms – Rivals of Flipkart like Amazon and Snapdeal have been rising the ladder rapidly and are currently breathing down the neck of Flipkart. While Flipkart continues to retain the top spot, with the loss of its CFO, any wrong move will break its position and it will be difficult to bounce back.
Sadly, it seems Flipkart is unable to hold on to its top executives, and that is not a very good sign for a company. Constant changes in management is not desirable as it slows down progress. We hope Flipkart will be able to keep itself stable amidst this storm of resignations and attain a properly structured and stable management. However, the real reason for Baweja’s exit remains to be seen.