Falling back on the war analogy again to describe his company’s ongoing battle for sector supremacy with Uber, Bhavish Aggarwal, co-founder of cab aggregator Ola, on Friday said even as Americans were carpet bombing India with capital, he and his company were fighting a guerrilla war with them.
Aggarwal again equated the Didi Chuxing and Uber war in China to World War-II and himself as a Vietnam warfighter. Indian e-commerce companies -- which have in the past year fallen out of favour, with foreign investors either stopping investing money in companies or doing it at a much lower valuation -- are worried about companies like Amazon and Uber, which have deep pockets and major plans in India.
“With all due respect, I am not saying it's a war-type situation, but this is corporate war and the competition between us and Uber is very intense. After what has happened in China, ride share is a very intense industry globally; there is an irrational belief that it is a 'winner takes all business' situation and there will be one guy standing in the end. That leads to an irrational exuberance from investors, too,” Aggarwal said.
He added that Uber had pumped in a lot of money; the company threw money around into every geography it went into.
“You might either call this capital dumping or you might not. The fact is money is thrown where customers get lots of discounts and drivers get lots of subsidies. The negative social effects are that once these are withdrawn, drivers have an issue. That is the nature of competition which most Indian industries haven't seen. FMCG is not this competitive. It's more about margins there," Aggarwal said.
"However, our industry is very competitive and what happened in China between Uber and Didi was like World War-II. Where there were two people with a lot of ammunition against each other and in the end one company won — India is not like that — our context is not like China's. In China, there are only these large internet giants and the newer companies like Didi can stand on their shoulders. The foreign competitor is actually at a disadvantage... India is not like that,” he added.
Reiterating the Vietnam war analogy, he said he saw himself as part of a small band of guerrilla disruptors fighting against corporate giants.
“We are the local guerrillas. We have the Americans carpet bombing us but we will go into the nooks and corners of the country, and we will find those opportunities in the niche areas and in the large area. We will build the products relevant to our country and make sure that we are the company which is more sustainable and more profitable with larger market share,” he added.
Aggarwal also said that his investors still had a lot of confidence in the company and added that Ola was still the biggest player. It would become profitable in two years, he said.
“We will continue to lead the market, gain market share. We have significantly improved our bottom lines over the past year or so and we have a very clear path to profitability. Within the next two years, we will be profitable,” he said.
Flipkart’s Sachin Bansal and Aggarwal had last year raised the banner of nationalism and urged that the government should design policies which would favour homegrown companies. Many had pointed fingers at their protectionist attitude then. Aggarwal said that it was for the government to decide how it wanted to deal with capital dumping.