We have been hearing that the Indian ecommerce sector is fast hiring the best talent available in the country and this placement season saw ecommerce companies recruiting big numbers at premier institutions like the Indian Institute of Management (IIMs) and Indian Institute of Technology (IITs).
But a look at the recent developments in this sector shows a picture of high-ranked employees in these organizations leaving their jobs. If we take some of the leading ecommerce brands into consideration, in the last few weeks we have seen big names like Gaurav Kachru, Pearl Uppal leaving Smile Group where they were heading DealsAndYou and FashionAndYou respectively. And if rumors are to be believed, then Aneesh Nair, Group CTO (ECommerce), Anirudha Atre - CFO (FashionAndYou.com), and Vijay Sheoran, Group HR Head (ECommerce) have also left Smile Group (the holding company of DealsAndYou and FashionAndYou).
It is not only the Smile Group, as FlipKart has also had its fair share of people leaving the company, with the recent one being Maneesh Mittal, a former FlipKart VP joining OlaCabs.com. Again sources have told us that names like Anupama Sharma, Vipul Bathwal, Pramod Sarja, Venkat Valliappan, Ashish Kumar were hired by FlipKart and then couldn’t be retained.
A recent Forbes cover story on FlipKart mentions that there is just too much of IIT Delhi’s Jwalamukhi hostel club in the company and apart from that, the company has management issues in scaling up. Insiders also believe that employees are horrified by the lack of professionalism in some of the ecommerce companies in India.
Amidst all this hoopla of high ranked officials leaving their jobs in reputed ecommerce brands in the country, we have seen a concern among the people employed in ecommerce companies about the sustainability of their jobs. Following this, India Digital Review quizzed some of the players in the industry on whether it is a good time for being an ecommerce employee in India?
The Overall Scenerio
K Vaitheeswaran, Founder and CEO of IndiaPlaza believes that a year back, ecommerce industry was flush with funds and most ecommerce companies used these funds to show extraordinary growth rates in top line in short periods of time for valuation purposes.
“Apart from sales, team quality is an important valuation metric so most of these companies outdid each other in hiring top talent at high salaries. Unfortunately the realities of business are now catching up. Entrepreneurs and investors are both realizing that ecommerce is also a business and not a hobby and hence must, at the very least, pretend to attempt to make some money. In a low margin retail business, there are two ways of making money – increase margins and manage costs tightly. That is beginning to happen as far as people are concerned. Many ecommerce companies hired on expensive professionals and now realize that the business cannot afford such people, hence the parting of ways,” said Vaitheeswaran.
According to Vaitheeswaran, this is further accelerated when the same investors who went for just topline growth at any cost start singing a different tone and ask entrepreneurs for profits and margins. This is forcing entrepreneurs to start cutting costs and reduction of wages is one way to accomplish this.
Ankur Warikoo, CEO, Crazeal.com (Groupon India) was of the view that ecommerce is a new industry and hence talent was acquired from other industries and hence not all of it was relevant talent. “It was assumed that retail industry would be a good proxy. But it isn’t. And attrition in these circumstances is obvious. Ofcourse, the flip side of expectation mismatch also occurred. People were brought in and promised the moon, against the backdrop of investor funding and growing transactions. As would be the case, some of them had a very different image of how it will pan out for them professionally,” opines Warikoo.
Warikoo however says that this is true for all industries. “The airline industry is also perhaps going through the same cycle. What makes it harder for ecommerce is the fact that people misread the gestation time for profitability and the scale it can acquire in the short-term. For a retail company to lose 500 crore on a topline of 5000 crore is still pardonable (maybe!). But to lose 100 crores on a topline of 60 crores was always going to be a stretch!” he added.
Mukesh Bansal, Founder and CEO, Myntra.com firmly states that in Myntra at least, there have been no lay-offs to address the need to cut costs, saying, “While we recognize the need to remain cost effective, payroll and employee development and engagement remain one of our key spends and we see this as a strategic bid to ensure that we attract and retain top talent in the company. The company is obsessively performance oriented and have much shorter review cycles with quarterly goal setting and feedback. This is important for us given the aggressive growth we're experiencing and the stretch targets we work to.”
According to Bansal, anyone unable to manifest these in their work and unable to meet the organization's performance expectations is given a set time to scale up or is managed out and this commitment to building a high-performance work culture might cause a few disgruntled individuals to question the stability of this sector as a whole but the successes that ecommerce is witnessing, even in difficult, recessionary times should counter that decisively.
However, Aparna Ballakur, Chief People Officer, FlipKart, was of the opinion that a year ago, ecommerce started gaining momentum in India – both in terms of business potential and as a career hotspot and since ecommerce is a new sector, every new entrant has had to learn the ropes on what works through experimentation.
“Ecommerce continues to attract talent that wants to be part of a high growth/ high impact. As the number of ecommerce companies in India grows, opportunities for top talent will continue to grow. The exciting thing about ecommerce is that that we see a lot of high quality talent including senior professionals coming here from traditional retail and technology backgrounds. This speaks volumes about the industry potential. At FlipKart we are aggressively hiring the right talent who will partner us in our growth story. This is across all talent segments- technology, retail, operations and leadership. Looking at the pace at which the industry is growing, the need for top talent will only keep going up,” Ballakur said.
The Inside Picture
Speaking about the work force and employees in his company, K Vaitheeswaran of IndiaPlaza said that they have always been careful of costs and hence after 13 years, we still have just 150 employees. “Compare this with ecommerce companies that are just a few years in the business have already built team sizes exceeding a few thousands which is crazy in terms of costs. We are fine with our team strength and the way our business is growing, we will probably keep adding people as long as the business can afford the costs,” added Vaitheeswaran.
Mukesh Bansal of Myntra informs that there have been no layoffs since the company’s inception except on the occasion of their move out of the personlization business and from the B2B space to the pure B2C arena. “This was more a one-time restructuring exercise over a year ago and was generously compensated by the company. We have not experienced much voluntary turnover at Myntra. Our annualized attrition is less than 10 per cent for the most part and less than 20 per cent including high attrition groups like customer care and delivery which tend to be much higher in the industry. Most of the leadership team who joined us a little before Myntra transitioned into the fashion and lifestyle space are looking to complete a 2 year stint at the company and are going strong,” Bansal said.
Ankur Warikoo of Crazeal says that theirs has been the story of controlled growth. “We have grown 30 to 50 per cent Month on Month, while eyeing profitability and sustainability all through. This has percolated down the company. In the last 8 months, only 11 employees have left the organization voluntarily. Attrition is less than 0.5 per cent,” Warikoo informed adding that it should always be about the function you handle and the amount of fun you have doing that work.
According to Aparna Ballakur, FlipKart sees the ecommerce space as a great place to build one’s career. “Being a relatively new industry that is witnessing an extremely high pace of growth, a career in ecommerce boasts of flexibility, an opportunity to think outside conventional boundaries and see your work make a visible impact. For the right talent this will be a very attractive industry to be part of. Anyone who wants to enter this sector should be ready to work in a fast paced environment, be willing to experiment, learn from mistakes and want to build an industry. Being able to do all of the above is a once in a lifetime opportunity,” she added.
As per deals in the ecommerce segment, over $750 million has been invested by PE and VC funds over the last five-six years. Ecommerce transactions have crossed Rs 45,000 crore in 2011, according to estimates by the Internet and the Mobile Association of India (IAMAI). The value of transactions is expected to touch at least $70 billion by 2024-25 and could even rise to $260 billion if all factors remain conducive to growth. But to sustain these numbers, the ecommerce industry needs its people to be in the forefront of leading it through its rough patch, because, as Ankur Warikoo of Crazeal says, “What ecommerce is going through can be for any other industry or company.”
Image Courtesy: The Hindu.