India's eCommerce market is preparing big time for the upcoming festive season. Following the success of Amazon's Prime Day sales in August, its main rival Flipkart today said that it had on-boarded more than 50,000 mom-and-pop stores to deliver across more than 850 cities.
The festive season, which starts from next month and peaks towards Diwali, would see Flipkart expanding its "Kirana" (small store) program to remote cities including Kannur (Kerala), Agartala (Tripura) and Tinsukia (Assam). The idea is to combine their hyperlocal presence with Flipkart's innovations to tech-enable the mom-and-pop store ecosystem in India, the company said.
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Earlier in August, Flipkart had rolled out 'dark stores', which are essentially shops or outlets operated to service customers in nearby localities, across several cities in India. These dark stores are quintessentially warehouses. In the case of JioMart, it will also use its own Reliance Retail stores.
A month before this rollout, the company had launched its digital marketplace called Flipkart Wholesale to serve the local Kirana stores as well as the small and medium enterprises in India. The service was piloted in August for the grocery and fashion categories. The new marketplace will help transform the Kirana retail ecosystem in the country by leveraging locally developed technology, the company had said.
It was announced that Flipkart would acquire 100 percent stake in Walmart India, a subsidiary of the US retail giant Walmart that operates the Best Prime cash-and-carry business in the country. The project aimed to provide a new experience to shoppers in a bid to take on Amazon and the upcoming Reliance Retail owned JioMart.
In a prepared statement today, Flipkart said the Kirana stores had a high customer satisfaction score and the company's latest initiative would provide an opportunity to generate additional revenues while also building on consumer-centric skills of these stores. "Through a combination of their hyperlocal presence and innovations by Flipkart, this program has become a great enabler in strengthening the Kirana ecosystem in the country," says Amitesh Jha, senior VP for e-kart and marketplace at Flipkart.
Flipkart had initiated plans to expand its seller base barely days after raising an additional $1.2 billion (Rs.8,970 crore) in a fresh round of funding by Walmart. The US retailer had acquired a 77 percent stake in Flipkart after paying $16 billion in May 2018.
The company's latest move comes barely a few weeks after Amazon had revealed a major win around its Prime Day sales on August 6 and 7 with the participation of 91,000 small and medium businesses, artisans, weavers and women entrepreneurs in the sale. The company had claimed that its deliveries covered 97 per cent of India to over 5,900 postal codes.
During last year's Big Billion Day sales, Flipkart had reported more than a million shipments from the Kirana stores. In comparison, Amazon claimed that twice the number of customers had signed up for its Prime membership program during Prime Day 2020 compared to 2019. Over 65% of the new sign-ups were from outside of the top-10 cities of India.
Given the growing presence of Amazon and the clout of Reliance Retail through JioMart, Flipkart is having to redouble its efforts to get sellers on board and deliver to the remotest parts of the country.
While the big-three continue to compete, we believe that happy days are here for the consumers, especially in the aftermath of the pandemic-led lockdown.
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