Times Internet is significantly scaling down its Indiatimes Shopping (e-commerce) operations, MediaNama has learned from multiple sources at Times Internet: Subhanker Sarker, who was brought in from MyDala to lead Indiatimes Shopping a year ago, will no longer be heading the business, operations are being scaled down, and there have been layoffs. A Times Internet spokesperson, on being contacted initially by MediaNama, said that it would not comment on internal company matters, and has not responded to further queries.
We have not been able to ascertain whether Sarker is going to stay with company, but our sources say that he has been given the option to take up another role within Times Internet. Sarker is currently on vacation (and International roaming), but was to speak with us last week; he has been unavailable for comment since, and has not responded to text messages. V Nagarajan, Head of HR at Times Internet, declined to comment on whether Sarker is still with the company, as well as on his role in the organization. From what multiple sources tell us, Saurabh Malik has taken over as interim in-charge of Indiatimes Shopping. Malik hasn’t responded to our calls after initially telling us he’ll get back to us.
We had also heard that around 25-50 people had been laid off at Indiatimes Shopping a couple of weeks ago, but a senior Indiatimes Shopping exec, speaking with MediaNama on condition of anonymity, said that the even though focus of the company is on reducing the burn, there aren’t significant layoffs, saying that “The focus is on getting into an operating margin positive mode and a good, healthy EBITDA. There were certain businesses like B2B sales that some leaders had started, and that did not make sense because it did not contribute in terms of sales coming in. We are shutting B2B sales.”
On the rumors of layoffs, the executive said that “Most of the guys have been adjusted into different divisions, especially from the tech team. Shopping is just one product, and Satyan’s (Gajwani) focus has been on developing product businesses. We are using that manpower now to invest in other divisions. The plan (for shopping) was a buy-and-sell model, which is why there was an investment in warehouses. We have decided that that’s not a strategy we want to follow. We have held our ground on a marketplace model (while others switched to it later). Only the B2B team and the warehouse team have been affected (in terms of layoffs).” There was also an ad-sales business (for selling advertising on Indiatimes Commerce), which became defunct after a redesign, the executive said. “We had a burn of Rs 7-8 crore a month, and the mandate is to bring it down to Rs 1 crore a month by reducing warehouse costs and logistics costs. Right now, it is down to Rs 3-3.5 crores a month.”
Another Times Internet executive said that there have been 36 people laid off (including 22 from the Times Internet’s Gurgaon office). We have asked Nagarajan for specific information on layoffs, but haven’t heard from him since.
The move by Times Internet to scale down Indiatimes Shopping is, in a sense, an acknowledgement of the fact that the environment in which E-Commerce in India is operating is inordinately tough, with capital hard to come by because of the FDI regulations in the country. Investment has gravitated towards those that are already firmly entrenched, and companies like Flipkart and Snapdeal have raised substantial funding recently. Add to that Amazon’s entry, and the risk in what is typically a last-man-standing business of scale, is inordinately high. Multiple executives at Times Internet we spoke with said that the company was unable to raise venture capital funding for the marketplace business.
We also had information that Sarker, when representing Times Internet, both via email and at a meeting with Kapil Sibal organized by ASSOCHAM, had opposed foreign direct investment in E-commerce in India; this was confirmed to us by several senior e-commerce industry executives who had also attended that meeting. Contrary to this, in response to this query on the Times of India Group’s stand of FDI in E-commerce (alongwith a copy of Sarker’s email to ASSOCHAM on the Times of India group’s stand) Satyan Gajwani, CEO of Times Internet, told MediaNama that “We are in favor of 100% FDI in e-commerce.”