In 2007, Sachin Bansal and Binny Bansal, both IIT grads and in their late twenties, started Flipkart with a seed capital of Rs 4 lakh. Having worked with Amazon previously, both have followed the Amazon and eBay model of selling books online. Flipkart which has revenues of Rs 25 crore now, plans to take the business beyond selling just books. BW's Suneera Tandon met Flipkart CEO Sachin Bansal to ask where will Flipkart go from here. Excerpts.What is the potential of your business model ie of retailing books online?Online book retailing is a volume-based business. Since the profit margin is as low as 10 per cent, volumes matter more. In the digital space only 1 per cent of the entire book retail business worth Rs 10,000 crore is carried out, we identify potential of Web as huge. Set-up costs are not very high, but services and logistics take about 10-15 per cent of the revenues. We broke even within 6 months of having started the business and are earning a gross profit of 10-15 per cent, thereafter.While 2008 revenues for the company were Rs 2.5 crore, 2009 saw a quantum leap to Rs 20-25 crore.In November 2009, we raised venture capital funding from Accel Partners. Rs 20 crore of this amount will be allocated towards strengthening back-end and technological operations. Advertising accounts for 5 per cent of the portals' revenue.What are the challenges you faced as a start-up in the e-commerce business?Getting people to trust the online payment mode was quite a challenge initially. Also building trust in suppliers as a start-up took us some time. Once the popularity of the portal grew, transactions increased.What is the customer base and title capacity of Flipkart?We started with 50,000 titles in our catalogue and have expanded to half a million as of now. So far 250,000 customers have purchased books from Flipkart. Our business is only restricted to the Indian territory right now.With other bigger players such as Infibeam, Rediffbooks, Indiatimes, how do you keep afloat in the market and battle competition vis-vis pricing of books?We offer free-shipping on all purchases. Although our pricing is at a premium, we are working on more volumes. The higher the sales, the lower the prices. Timely delivery is our key focus and keeps us ahead of competitors. Prices of books range between Rs 95 and Rs 20,000.How does your back end work — from putting books online to delivering? What are the logistics involved?We have about 100 people working in the back end, which comprises ordering, stocking operations, packaging, shipping, vendor management, etc. We work with 300 book distributors in 5 cities from whom we procure books as well as 4 International publishers. There is a 50:50 ratio between the books stocked by our office and those procured from vendors directly. We function from 3 offices presently in Bangalore, Mumbai and Delhi. Apart from which we have a strong technical team that looks at catalogue management, stock checks, web-updates, etc.Are you looking at expanding the product base offered by your portal?As of now, we are only focusing on retailing books, we still feel there is a lot of potential in expanding the business of books on the Web. We are looking at expanding to more local publishers, regional books as well as more international publication houses. However, in the next two years we plan to add music CDs, low-cost mobile phones, movie DVDs etc., to our portal.What category of books generate the maximum sales for the portal?Fiction and non-fiction account for 50 per cent of the total sales. Apart from which medical, technical, management books too result in high sales.What kind of marketing and advertising initiatives are carried out by Flipkart?As of now, the marketing budget is minimal; we are only focused on digital marketing. Use of social forums and blogs works well for us. We also offer pre previews of books, signed copies to our customers. Soon our website, which is presently very simple, will be revamped to a more interactive one, allowing for discussion forums, book reviews, polls, etc.How do you plan to allocate the funds for future expansion?Opening more warehouses is on the agenda, along with expanding the existing Bangalore office. We also plan to expand our supplier base from 300 to 1,000 and increase our total title strength to 4 million. We expect to touch Rs 100 crore in revenues by 2011.suneera dot tandon at abp dot in
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There has been a strong wave of internalisation within the Indian education system which is primarily ascribed to the influx of foreign institutes and universities establishing base camps in the country. In a similar yet distinct vein, Edexcel (Educational Excellence, one of the UK's most prominent examination boards, known for their international syllabi, are acutely interested in promoting a modern international curriculum In India. The company has been present in 85 countries has been prominent in the Indian sub continent but is relatively new in India. Dr. David Davies, Academic Portfolio Manager for the international section at Edexcel, has high expectations from schools and colleges in India to adopt Edexcel's global curricula, having been associated with British Council, schools, colleges and government bodies around the world. In an interview with Alokita Datta, Davies talks about Edexcel's plans in India, developing and contextualising international educational programmes in India, the need to accept and encourage vocational courses and how holistic global education can be provided in India and other countries.Edexcel has been present in South Asia for a number of years through your system of examinations but has not been very well known in India. How do you plan to expand into the Indian market at this point in time?India is still a new market for us, we have been here only a few years but there has been one school, the Calcutta International School which has been offering Edexcel examinations for about 20 years but by and large we are new in India. We are building up our team; we already have 45 affiliated schools in India and are focusing on Delhi, Chennai, Ahmedabad, among other big cities in the country and hope that we will soon have as many schools affiliated in India as we do in Bangladesh and Sri Lanka. In both these countries there are about 150 schools affiliated with Edexcel and almost 95 per cent of the international schools offer Edexcel examinations.I think this the right time for us to be expanding in India because increasingly, parents and students are seeing that they have more chances with an international exam board to utilise the opportunity to go abroad. People are moving more and more with our premier qualification, which is the Edexcel A level for class 12 which is accepted in universities all around the world; in Australia, Canada, US and so on. People think that they may not want to go to those countries immediately but want to have some experience in those countries later. Thus if you pass an General Certificate of Education (GCE) A level examination, you will be given credits corresponding to it in the US and Australia, and in the UK most students go to universities with an A level and we are one of the 4 awarding bodies in the UK offering A levels which means that people know that it is a greatly recognised qualification. I think the other trend for students in India, is to get UK degrees without having to leave their country. Our other qualification, the Business and Technology Education Council (BTEC) Nationals make that possible. These are vocational qualifications for class 12 that are available in India and we already have colleges that will accept these to the next level which is the BTEC Higher National.When were the BTEC programmes conceptualised and what were was the idea behind developing them as parallel, full- fledged courses?The BTECs go back to around the 1970s and the intention was to give vocational students a qualification comparable to the academic exams, the International General Certificate of Secondary Education (IGCSE) for class 10 and the A levels for class 12 that is offered by Edexcel. So that vocational education was not seen as a second class option after all, a lot of people with vocational training earn a lot of money. Also, not everyone is suited to appearing for long written exam papers, some people prefer kinaesthetic learning, learning by doing, acquiring skills and that is exactly what the BTEC National offers to them. Say, you want to work in the media industry, you wouldn't really want to do an English and maths exam; what you want is to get hands on about the media industry, training. Our qualifications are supported by various workplace institutions and professional bodies. The route there is that a student can take a BTEC National in class in school and then go to a college, and there are around 10 colleges in India at the moments who offer a Higher National diploma two thirds of a degree. You can then get a further year to the final year of the degree offered in a college in India by universities from the UK. This means that the vocational student has an equivalent degree and is much less expensive than going to the UK or the US. I think therefore, that this provides university education within reach for the average middle class student.To what extent is localisation important within the numerous international curricula and examination systems that Edexcel offers? How can that be introduced in India, for instance?Localisation can come into both, our academic and vocational courses. For example with our IGCSE, if you do business, you can study Indian business, within history and geography you can study the history and geography of the Indian sub continent. So those options are there. With the vocational courses the BTEC Firsts in class 10 and BTEC National in class 12 there is much more opportunity for customisation because you are not following a set syllabus that leads to an exam paper, you are following units which give you guidance on an assignment. For instance, if you were pursuing a BTEC National in business, your assignment could be about work simulation for an Indian company. So you pretend that you are a company setting up a new mobile phone business in India; how you do deal with the competition, one of the groups may become marketing representatives and another group of students could take on finance, events and so on. So students like about what it is like to work in the world of work. I think this is very relevant to students in India who by following the BTEC programmes, would be well on their way to having exactly the same qualifications as someone from the UK. The bachelor's degree doesn't say taken in India within brackets, it is the same degree you get abroad. Since these courses follow a different mode of instruction what are the variations in exam patterns that Edexcel offers?I think it is relatively limited when it comes to a subject like mathematics, which would be the same whether you follow a local or an international board. But a subject like English, we approach in a very different way. What we have is a combination of examinations and course work. The exam is traditional but within course work we could ask students to compare two works of literature which is something not very well done if you have a 3 hour exam paper to finish. With the literature course work, students can write their paper in depth, over an extended period of time. In science, we put much more emphasis on practical work which is done throughout the course and the student writes about it in the final exam paper. Some people do not work well under a timed examination system, the ticking clock intimidates. The beauty of the BTEC is that there are no exam papers in these courses which are ideal for a lot of students. With a BTEC course, a student is expected to do course work, set of assignments, cover work at your own pace so there is no pressure of time and at the end of it you are assessed on what you have actually done. If it is business, it could be a business simulation, if it is art and design, you may have created some art work; not over a 3 hour exam but over a period that enables you to get it absolutely right. Or if it is drama, students have to stage an actual play. We also have BTEC courses in sports, so students can play and analyses themselves at the same time.break-page-breakHow do you introduce the market perspective into a course with regard to the economic viability of the sills and products that students create while pursuing your programmes?The guidance in the syllabi is all about judging the market place. In India for instance, we bring in new games such as computer game designing which didn't exist till a few years ago. Within the course on media students can choose an option such as print journalism, or film and screen writing. We revise our courses every five years wherein we go to the industry bodies and ask them what is new in their industry. Thus we reissue syllabi according to new requirements and the beauty of this is that a student is assessed on affixed set of criteria, which is different for a pass, merit and distinction. The teacher decides whether he/she has met them based on the portfolio of work put together which may include, video, PowerPoint slides etc. An external verifier from the UK is sent to judge if a college is at the same level as other colleges, who comes in twice a year for each of the two years of a course and most of the schools and colleges get it right.Because the BTECs are unconventional, how do you equip teachers to teach these courses differently?Exactly, the teacher can no longer stand in front of the class with students taking notes. They need to be out there with groups of students. What we do is offer every school that wants to start BTEC , two days implementation training. We haven't introduced this in India yet but the BTEC Nationals have been successful in many schools in Sri Lanka and Bangladesh. The schools affiliated with us follow the IGCSE and the A level exam but with the BTEC we are starting from scratch. I think an important aspect is that parents need to be convinced as well. First of all, many people might still want to see their children as doctors and lawyers.What are the challenges that you have had to face because of the diversity of people and opinions in India?Changing the mindset of people towards vocational courses is a big challenge. We are focusing primarily on metropolitan cities however, we are going into some smaller cities as well, such as Calicut . But we intend to start with the growing middle class in the cities first. Also I think it is fair to say that India is a very exam oriented country, so there are challenges of perception, people might raise their eye brows at the idea that there are no exams with the BTEC courses. But we need to realise that the BTEC's are holistic courses where students have to work and create products and services. In fact we have another qualification known as BTEC work skills which provides students with hands on training about things such as, how to prepare a CV. We are also bringing in a primary curriculum and a secondary curriculum so that we have everything for the age group of 7 to 18. There is a hybrid qualification known as the International Diploma which we are also coming out with. This is a trust vow to meet the complaints from universities who say they have seen so many students with grade A in all their subjects but they need something more. The International Diploma consists of either the A level exams or the BTEC Nationals plus three other subjects. One of the subjects is global perspective which is like global citizenship, one is a project which is of the student's own choosing and third is the BTEC work skills.But work skills as a course would probably not be successful if they followed a uniform syllabus, they need to be specialised...The beauty of BTEC is that it can and needs to be flexible. Yes, the job market is different everywhere and what an Indian employer may expect from a candidate's CV could be different from other places. So we need to explain the context to our external verifiers (from Edexcel UK) and things could run perfectly well. If team work is important in the work place, or negotiation skills in the workplace, you can shift emphasis depending on your choice of units. The implementation training takes place in schools and the verifier takes the instructors through the process of teaching, conducting assignments, depending on the course. In the case of academic courses, we recently held a training course in Delhi we sent our chief examiners from the UK to organise sessions with teachers from different schools. If it is a softer subject like music, we also provide online training where teachers can correspond through email. Our links with Pearson which is about 8 years old enable us to provide textbooks in virtually all subjects. Since they have come in they have invested 80 million pound on new technology and the other big thing they give us is resources. Now we also have Edexcel online, schools can electronically download exam papers and all teachers are given email addresses of subject advisors if they have queries.Is the final grading for all courses conducted by a central body in the UK?At the moment we do all the markings ourselves in Edexcel and currently we do a 100 per cent of it in the UK so people know that they have been trained by us according to UK standards. I think it lends validation because in theory, students are marked on computers and thus could be evaluated in different countries but our feedback tells us that people want to know that there assessment has come from the UK. But there is a body in the UK that regulates us, which has been set up by the government and is called Ofqual. If ever we do anything wrong people can complain about it to them. Initially our IGCSE examinations were only meant for students of other countries but there has been an outcry since which the UK government has decides that these courses be made available in the UK as well.What has the experience interacting with Indian schools been like? How will you go about the process of acquiring recognition from Indian educational institutes?The response from all schools has been very positive, but the one issue they have all raised is if Edexcel courses are recognised by the local universities, which I understand is a key point. This is a work in progress for us, the A level courses are already recognised by the Association of Indian Universities and working towards getting recognition from University of Delhi and other central universities and we discover that is quite a big task! It will take us a few months but we are confident that they will give us recognised status and it will be the same task with the BTECs. No one is recognising them as of now but I am sure they will. Of course with the degree route it is not essential to have the BTEC courses recognised, as they will be conferred by a UK university in India. But our idea is to have BTECs recognised going straight to Delhi University. The main challenge is in making our name known. People have not really heard of Edexcel, it stands for educational excellence. We are the former London University School board, if people knew that it would improve our brand image. So we have been around in India since the 1960s but not under the name Edexcel.Your focus seems more on schools even with the vocation courses....That is because we have quite a bit of success already with colleges. Also students will have a better chance of being successful in vocational courses later if they have been trained in the BTEC way, as it were, from the beginning. Also, it has been found that in the UK, if students are just given an academic diet in class 9 or onwards, they start skipping lessons because it doesn't create interest in them. Our success has been the most with BTEC Firsts (at class 10 level) because students may be interested in automobile designing, travel and tourism and because of that they work better in studying English and maths and thus see the point of working that way. Ultimately this is a very good opportunity for students and parents all over, with more limited means and resources.alokita dot datta at abp dot in
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Isher Judge Ahluwalia, chairperson of the Think Tank Icrier, chaired the High Powered Expert Committee on urban infrastructure. After labouring for nearly two years, the panel has submitted its recommendations to urban development minister Kamal Nath. Ahluwalia talks to BW's Gurbir Singh about the problems of satellite towns, and how to make our cities more liveable. Excerpts:In the future, do satellite cities still have a place in urban planning?It depends on various factors, especially transport and housing. If these are provided in metropolitan planning in satellite cities, they become feasible. On the other hand, you can have independent, regional hubs, like what Dewas is to Indore. How do you evaluate key satellite cities such as Navi Mumbai and Gurgaon? Navi Mumbai had got quite a few things right. We were impressed by the quality of governance, and the waste-water treatment system. Gurgaon, on the other hand, is more haphazard where basic tenets have not been met. For satellite cities, pubic-private partne-rship works if risks are assigned. But there are problems if the government does not know the risks they are transferring to the private sector. Most whine about the rash growth of cities. But your report sees them as founts of energy. Generation of wealth is increasingly dependent on the knowledge industry, and more and more cities have become reposi-tories of knowledge and technology. Without cities, growth will not happen. But we should think of cities and their hinterland as one continuum. It is a mistake to highlight the rural-urban divide, as it is an artificial divide. You see governance as a core issue. How can this be addressed?We need municipalities and corporations with secure sources of revenue, local bodies that can guarantee money is well spent, and that are accountable to the people. They must become market-worthy, be able to raise money through market bonds. Then they will have money to spend on, say, an efficient water delivery mechanism, and not depend on some state government Jal Board. Autonomy is a big problem dogging the governance of cities. Central and state governments don't allow decentralisation of local bodies as they think "where will they get their capital from?" But without reforming city government, how will we build cities? It is not a problem of money, but of systems and governance.Did you come across municipalities that have performed exceptionally well?Yes, we found Hubli, Dharwar and Gulbarga in Karnataka handling their drinking water supply networks very well. The experiment of Gorai, a suburb of Mumbai, turned out to be extremely successful. Gorai spent Rs 50 crore in putting its waste disposal system in place, and in turn earned Rs 70 crore in carbon credits.You have proposed an investment of Rs 39.2 lakh crore for urban infra-structure development over the next 20 years. Where will the money come from? From devolution of taxes, from state government allocation, from property tax reforms. We have also proposed a reformed JNNURM or New Improved (NI) JNNURM. We want it to be inclusive of all cities, not just the current 65. And it should be programme-oriented and not project-based as it is now.(This story was published in Businessworld Issue Dated 20-06-2011)
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