Now, Flipkart bets on smartphone deals for growth
BENGALURU: India’s largest e-commerce firm Flipkart is betting that its recent exclusive deals with smartphone makers such as Motorola, Lenovo, Xiaomi and LeEco, would help it double sales growth in the smartphone category in the next fiscal.
Chief executive Kalyan Krishnamurthy is pushing his top executives to win more such deals as Flipkart fights to preserve its lead in Indian e-commerce. Smartphones account for more than half of Flipkart’s sales. The category was key to the company’s revival last year as it battled competition from Amazon.
“Once Kalyan returned, we’ve again started focusing on exclusives. The focus on exclusives was always there, it’s just that the aggression has increased now,” said Ayyappan R, a director at Flipkart.
Over the past nine months, since Krishnamurthy returned to Flipkart, the online retailer has inked crucial partnerships with top brands such as Samsung and Apple, which launched its flagship iPhone 7 in the country with Flipkart last year.
Recently, Flipkart also tied up with other top smartphone makers like Oppo.
These partnerships, along with attractive financing and product exchange schemes, have led to improvement in monthly sales at Flipkart over the past four months, said Ayappan.
Some analysts, however, say Flipkart’s reliance on smartphone sales is risky.
First, smartphones offer low margins to online retailers. Then, Amazon could simply offer better terms to smartphone brands and get them to switch to its platform.
Nevertheless, Flipkart is pushing hard to protect its lead in smartphone sales. Earlier this month, Mint reported that Flipkart expected gross sales to increase by 50-60% in the next financial year. For smartphones, which generate over half of the company’s current annual sales, growth expectations are even higher.
Flipkart wants to grow close to 100% in the flagship segment in 2016-17, Ayyappan said.
“Over the next two quarters, we will build on the selection, ensure that there are price-competitive products in every price segment,” he added.