International Joint Ventures and Merger & Acquisitions

FLIPKART SUPERMART: A Step Into Online Grocery

August 20, 2018

To manage your grocery expenses, Flipkart has finally meddled its way into online grocery with the launch of “Flipkart Supermart”.

To manage your grocery expenses, Flipkart has finally meddled its way into online grocery with the launch of “Flipkart Supermart”. The online grocery segment in India has many big players like Big Basket, Grofers and Amazon already but till now no-one had managed to dominate it regardless of the great revolution in the way every day household items are sold online.

Flipkart tried to venture in grocery segment in 2016 with its Flipkart Nearby app but shut down in less than 5 months after its launch. Following that in November 2017, Flipkart did a pilot run to check its new plan and the upshot Flipkart Supermart is with us now within few days of its $16-billion acquisition by Walmart. Flipkart has also set up a warehouse near Whitefield in Bengaluru with a capacity to handle 3,000 orders a day in the city.

Flipkart aims to sink its roots deeper into the market by launching an extensively separate supply chain, bringing in its own label, giving every day discounts, etc. The company has launched Supermart in Bengaluru and plans to expand the services to other metros by the end of this year. Flipkart’s groceries portfolio currently comprises staples, FMCG and dairy products, and the category can be accessed through Flipkart’s android and iOS mobile apps as well as its desktop and mobile websites.

Manish Kumar, Head of Groceries at Flipkart said, “Grocery shopping is a mundane chore in any home, despite its outsized impact on a household’s budget. And it remains an unsolved e-commerce market, despite its importance to consumers and to the economy. With Flipkart Supermart we have solved for problems of assured quality, savings, and convenience to create an unmatched offering. The feedback has been phenomenal. Customers who have tried it are absolutely delighted and have kept coming back. We’re now taking it wider and plan to expand our reach and scale rapidly over the coming months”.

To lure the customer, Flipkart has focused on basics like quality, pricing and convenience. The products delivered to the consumers are promised to be fresh, economically priced and timely available. To ensure the freshness of the product, the Best Before Date will be prominently visible on every product. Unlike its competitors, Flipkart has assured that the products will be delivered to customer’s doorsteps at timings convenient to them instead of some fixed delivery slots.   

Flipkart has also introduced another wing named ‘Flipkart Supermart Select’. It is their private label which will deal in staples and consumables. Through Flipkart Supermart Select, they would try to provide pulses, spices and dry fruits at best market price with brand assured guarantee. Flipkart has clinched that all the products are sourced directly from farms and packed under supervision after rigorous quality checks.

As discounting can’t be a viable approach for online grocery platforms in the long term, to offset that Flipkart might utilize Walmart’s knowledge to keep it lucrative for both customers and company. To curtail the cases of returns and refunds, Flipkart has attempted an ‘open tray type of delivery’ through which the customers can quickly check the products before acceptance and any reason of return can be tackled then and there.

It has been observed that online grocery is a low margin business with price fluctuations occurring on daily basis which makes it a tough market to crack in India. Moreover, the offline sabziwalas (vegetable vendors) and nearby kirana stores (mom and pop stores) are still dominating the grocery business in India, particularly in Tier 2 and Tier 3 cites. It would be a tough task for online groceries stores to replace them in matters of cheap price and accessibility but innovations in supply chain, customer experience, logistics, and network support can help Flipkart to crack such markets.

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