Is Flipkart’s decision to hire Ivy League graduates justified? No!
Bangalore-based Flipkart is making headlines again – this time for recruiting management and tech graduates from Ivy League colleges – Harvard, Wharton and Stanford. “Flipkart has become a brand with visibility and we want to absorb global talent,” said Mekin Maheswari to ET (View story here).
Enhancing brand image with global talent can seem like a bright idea at first glance. But does this decision hold good for an Indian e-commerce brand that derives its revenues from Indian consumers?
Ivy League students, with their global outlook, can grapple with the Indian consumer mindset that still views online shopping with mistrust (view source). About 37% view online shopping as unsafe while 25% have low trust. What Flipkart essentially needs are fresh graduates with a good pulse of the rapidly growing Indian e-consumer market.
We also can’t help but wonder: why is Flipkart trying to hire from international schools? Is it because of the entry of global brand Amazon and its pre-established credentials? Is Flipkart worried that Indian consumers may make a beeline for its competitor driven by international charm?
Today, top Indian B-schools like ISB Hyderabad and IIMs have excellent world-class faculty. ISB, for instance, has international faculty from Wharton, Columbia and Brown University. It also has highly diverse class, comparable to top Ivy Leagues. Indian B-school graduates are not only internationally brand conscious, but they can re-invent businesses with a global outlook.
Not to forget, IIM Ahmedabad is one of the toughest B-school to crack in the entire world. While the acceptance rate at Harvard is 13% and Stanford 7.2%, it’s 0.25% for IIM-Ahmedabad. Also, IIM Ahmedabad and Bangalore, boast of the top GMAT scorers worldwide.
The ET report states that ‘Flipkart made 172 offers to the class of 2014 at IITs and B-schools’ and ‘hired 108 interns in 2013’. Some of these interns were from international institutes like Leeds University, IE Business School and Haas University.
Another point we cannot ignore is that Flipkart is basically a loss-making company. Though it has raised $1 billion and even acquired Myntra (Rs 2000 crore deal), it reported a loss of Rs 281.7 crore in Q4 (View source).
With no sight of profits in the near future, is it fair to hire international graduates with ridiculously high salaries? The average packages earned by Harvard and Stanford MBAs are in the range of $130,000 to $140,000 (around Rs 83,00,000). Whereas, Indian B-school grads earn in the range of $20,000 - $30,000 (around Rs 14,00,000).
Not only hiring Harvard or Stanford graduates is an expensive affair, it may well be a futile effort in terms of applying knowledge of the Indian e-commerce market.
While we hope India’s leading e-commerce brand keeps giving us great discounts, we also hope they continue hiring more from Indian B-Schools than shopping abroad.
To read counter-argument, click here: Is Flipkart's decision to hire Ivy League graduates justified? Yes!
