Flipkart eyes 100% rise in sale of home appliances this year
India’s largest online marketplace Flipkart expects sales of televisions, refrigerators and other large electrical appliances to grow by more than 100% this year, driven primarily by exclusive products from brands such as Samsung and VU and faster and more consistent product deliveries.
Flipkart also plans to relaunch its furniture category before its flagship Diwali sales event, Big Billion Days, and is betting on a new private label to boost furniture sales, vice-president Amitesh Jha said in an interview.
After seeing a revival in sales since October, Flipkart expects gross sales to increase by 50-60% this financial year.
After smartphones and fashion, the company expects large appliances to contribute the largest part of the expected growth.
Flipkart is already the market leader in large appliances though arch-rival Amazon India also announced aggressive plans for the category by setting aside as many as nine warehouses for large appliances last month.
“In the next three months, we hope to see exponential or hockey-stick curve kind of growth in this business,” said Sandeep Karwa, head of large appliances at Flipkart.
“We are aiming to capture 20% market share by March 2018— right now we are at 6-7% and growing.”
Flipkart’s focus on large appliances and furniture is part of its efforts to increase sales in a less costly manner. Until 2016, Flipkart, which started in 2007, had led the expansion of the e-commerce market in India, spending crores of rupees on discounts, advertising and logistics.
Since the beginning of 2016, Flipkart has slashed spending on advertising.
It has identified high-value items such as mobile phones, large appliances and furniture as its most important products, while it is trying to lower the cost of delivering low-value products such as fashion and groceries.
Flipkart has an important advantage over Amazon in large appliances: its ownership of Jeeves Consumer Services Pvt. Ltd, an after-sales services provider.
Flipkart acquired a majority stake in Jeeves for an undisclosed amount in late 2014.
“We’ve expanded our network and footprint with Jeeves and eKart—we’ve opened about 3,000 new pin-codes over the last six months,” said Karwa.
“The top brands have started to do exclusive products with us that are geared towards the e-commerce audience—if we look at Samsung, Panasonic, etc. Except for one or two brands, almost every large brand has a derivative with Flipkart right now. For instance, there are 2-3 TVs from Samsung which are exclusive with Flipkart right now, similarly with Panasonic and other brands.”
“The combination of derivative products and exclusives contributes about 50-60% right now of our revenues,” he added.