Flipkart to invest in groceries, furniture in the next 3 years
BENGALURU: Walmart-controlled online retailer Flipkart plans to invest in fast-growing newer categories such as furniture and groceries in the next three years to drive transactions that have surged more than 80% in some months, the firm’s chief executive officer (CEO) Kalyan Krishnamurthy said on Tuesday.
Flipkart is at least “twice the size” of its nearest competitor, implying Amazon, Krishnamurthy said in an interview.
Amazon India head Amit Agarwal had in a recent interview dismissed Flipkart’s claims saying the company does not have the time to focus on “unsubstantiated claims”.
Krishnamurthy also said Flipkart may either partner a video content firm or build its own content offering, as part of its broader loyalty programme, which was launched a few months ago.
“It’s a very unique loyalty programme and the uniqueness of the loyalty programme hasn’t fully played out yet….if the Indian customer wants content as part of that, we will offer content to the Indian customer as part of the loyalty programme. We are working on it and we will get to a situation where we will offer some sort of a content experience for customers. It could be through partnerships or we could build it on our own,” said Krish- namurthy.
on September 17 that Flipkart has held talks to buy a stake in Hotstar, Star India’s video streaming service.
Krishnamurthy said Flipkart may either invest in or partner offline retailers in groceries and furniture as part of its goal to lead these categories.
“Furniture is a small market, so I won’t take pride in saying that we’re number one there. There are only 3-4 players. What is unique about the furniture business is that it’s heavily built on private labels. Everything will expand there. The reach of the furniture supply chain is way lesser than that of ekart in general. So, that has to go up. The cost structure will improve, the experience will improve, so all of that will improve,” he said.
“Grocery is by far one of the most difficult businesses we have launched. In Bengaluru, we’ve seen a huge amount of customer adoption and a lot of learnings. So, right now, we’re in four cities. Today the grocery business is primarily about the monthly basket approach. If I look at that market versus the on-demand market, it’s about 80% in favour of the monthly basket purchase in India. Does that mean we will not get into the on-demand business? Once again, that’s another business where globally more people have failed than succeeded. So, we’re very cautious of that and when we do it, we want to do it the right way..in the long-term, we might not have an online-only approach (in groceries)—we will partner with the ecosystem….any kind of tie-up or partnership is possible,” said Krishnamurthy.
Mobile phones, fashion and televisions comprise the bulk of India’s $18 billion e-commerce market. However, the overall retail market is structured differently with groceries and fashion the two largest categories. If e-commerce has to continue growing at high rates over the next few years, Flipkart and Amazon will have to significantly scale up their grocery and fashion sales.
Separately on Tuesday, Flipkart’s Singapore-listed entity infused roughly ₹2,190 crore ($304 million) into its Indian subsidiary, according to a regulatory filing sourced from Paper.vc.