Flipkart first started operations in 2007, and, since then, has almost single-handedly driven the adoption of e-commerce in India. Starting with books, Flipkart today offers 150 million products across 80+ categories, has a registered customer base of over 300 million, and delivers across all 20,000+ pin codes in India. The levers Flipkart has used to scale the e-commerce industry are innovation and technology.
GlobeScan’s India Director Anup Guruvugari spoke with Mahesh Pratap Singh the Head of Sustainability and Social Responsibility at Flipkart about embedding sustainability into the business as they continue to grow..
What are some of the key highlights of Flipkart’s sustainability journey?
Sustainability has always been very deeply embedded in our DNA. Recently, we have brought a little bit more structure to it by creating a centralised sustainability function. This has accelerated progress by bringing in access to global best practices and really driving cross-functional collaboration. For example, we were already doing a lot of experimentation around mobility with electric vehicles but decided to give this effort a new definition of success by becoming a member of The Climate Group’s EV100 in which we pledged to transition our entire fleet to electric by 2030 and install charging for staff at 1,400 last mile hubs. So, it has been remarkable to see the kind of support we have got across stakeholders, employees, and that keeps us going in terms of taking even bolder stretch targets to accelerate our progress in the sustainability agenda.
Can you share some of your challenges?
Because we are a marketplace, and do not manufacture the goods we sell, one of our biggest challenges is our ability to move the needle and nudge our stakeholders to make progress. One example is packaging: a lot of sellers make their own packaging decisions. So how do you nudge them? We must go beyond saying ‘we recommend you do this,’ and instead empower them to be able to make the choices which are affordable, available, and scalable on their own home ground. The exciting part is as a new age company, you have the opportunity to really bring stakeholders along and shape the ecosystem.
With more people staying at home, have you seen growth in the uptake of products supporting a healthy and sustainable lifestyle? Do you have any specific focus on driving this trend?
I think there are segments where there is an appetite for locally sourced, greener products, but I would say we are still in the very early stages. However, given how large the market is, there is opportunity. We recently launched a programme called Flipkart Samarth. Any product that you buy from a Samarth storefront is genuinely coming from a local artisan, weaver, or handcrafter. This is something which will evolve with consumers becoming more aware of choices, with more communication around the footprint of the choices, what it does for planet, community, and society. Flipkart as a platform is trying to enable that conversation.
How has the discussion been around ESG in a market like India?
I have a unique vantage point given that I was in investor relations for more than a decade, and now sit on the other side of the fence, looking at the operating aspect of environmental, social and governance issues. It is a topic which has become of immense importance, particularly with respect to the COVID-19 pandemic in how resilient and future proof the business is when it comes to its ability to operate in harmony with the needs of planet, its responsibility to community and society around it; and operating a business in a fair and ethical way. Investors are increasingly paying more attention to this, which you can see in the form of more ESG-focused funds being launched, mutual funds and private equity funds focusing on ESG and so on. There are challenges as well – ESG at the heart of it is still very subjective. There is a lot of effort being put into driving more objectivity and standardisation in terms of how ESG gets reported.
What do you think will be the key trends around sustainable e-commerce in the next five years?
Firstly, I think you are going to see a lot of importance being ascribed to the entire value chain, and how you look at a product moving from point A to point B and minimise that footprint – from an environmental standpoint, how do you look at inclusiveness in terms of making sure that ecommerce reaches beyond the top 500 cities in the hinterlands and gets to tier two and three cities. Secondly, I see a move towards the entire ecosystem playing a part in these big goals. For larger players like us, as we pledge more audacious goals, we need to continue to enable the entire ecosystem to come forward and support us in making the goals a reality in our operating environment.
How has the COVID-19 pandemic altered your sustainability strategy both internally and externally?
When you embark on a sustainability strategy, you are committing to moving the needle over an extended period of time, spending time building the foundation before you really start seeing the results. So, to that extent I think COVID-19 has brought a lot more focus to these issues externally from the ecosystem standpoint. We have used this time to embed sustainability even more deeply within our business, and a lot of our commitments have continued to move in the right direction. It has established more interconnectedness between planet, people and business which has allowed for much broader conversations with stakeholders. As an example, in June 2020 we organized a virtual sustainable action summit, convening 500 to 600 people where we had an open dialogue that created more buy-in and support for our journey.
What are the major challenges that you see for any Indian corporation towards achieving Net Zero?
Corporations play a very important part in this journey. The world is not going to achieve its climate or SDG targets without India. India is in a strong position because we have leadership which strongly believes in these causes at a federal level, and that is driving progress at this stage. Within that, corporations play an important role because India’s sustainable development and climate needs are massive. India has mandated corporate social responsibility; whereby large companies must spend a minimum of 2% of average profit from the past 3 financial years on CSR. Given how large the market is, one challenge is the number of sectors that are in the early stage of their evolution – there are no plug and play solutions, there is no legacy. The advantage, however, is that we have a relatively clean slate to work with which allows us to stretch our definition of where we will play and how we will play. The second trade-off to being in such early stages, is that while you are planning for the long-term, you cannot really wait for the perfect answers to evolve. This means you may have to do things in the short-term which will still make you better than where you are, but that may not necessarily be your end goal. So, it is a fine balance in that sense, where people will have to take a leap of faith at times and hopefully longer-term answers will evolve along the way.