The online grocery business in India has many players, but no one dominates the segment despite huge transformation in the way every day household items are sold online. Flipkart Pvt Ltd, which has made its second entry in the segment after a failed attempt with Nearby, aims to make a difference by launching an extensively separate supply chain, bringing in its own label, giving every day discounts, etc.
Flipkart's grocery offering is called Flipkart Supermarket Select, which has already been launched in Bengaluru. The Supermarket Select has its own supply chain that is being used extensively for handling its grocery business.
"Currently available in Bangalore, we are very soon expanding to other cities in the country as well," a Flipkart statement said. Reports suggest the company is going to launch Flipkart Supermarket in five-six cities in the next four months. Online grocery market leaders like BigBasket, Amazon India, and Grofers, etc, are already vying to capture the bigger share of the segment but there is still room left for others.
"Grocery is the largest retail category but it's not a solved problem from an e-commerce perspective," Flipkart grocery head Manish Kumar told Mint. Grocery is a category where you need a dedicated supply chain with separate fulfilment centres and a last-mile logistics network. Our offering is differentiated because we've built a different shopping experience on the same platform, Kumar told the newspaper.
The company has brought in three major changes to attract customers towards its online grocery store. Flipkart, being the largest homegrown e-commerce company that's now owned by retail behemoth Walmart, has enough cash to splurge as discounts. Grocery is a high-repeat category where customers land regularly. So, the company will offer discounts on every day basis, which will help in customer acquisition.
Flipkart feels other horizontal players have not succeeded in offering quality, and Supermarket Select will ensure people get the quality stuff; the company wants to focus on things like proper display of manufacturing dates to build trust among customers. Delivery is another major challenge in the online grocery business. Most players offer specific dates and time slots for the delivery of products but Flipkart says it will come up with preferred delivery slots.
The company is planning to bring in everything - from fresh staple for your day to day meals to delicious snacks and beverages to packaged food -- people need to run a household.
Flipkart was planning to foray into the grocery business since December 2016 when it roped in Manish Kumar and Nitin Rajput to handle their new adventure. Both of them had quit Flipkart in 2015 to start their own business ventures. Flipkart's expansion to other cities of India would pose a challenge to other horizontal players in the grocery segment, say experts.
According to market research firm RedSeer, the Indian e-commerce has seen a steady growth over the years from 2014 and is currently pegged at $53 billion. The company says some segments like groceries, online fashion, and e-tailing are sectors that have grown to a good market size but have very low online penetration. "There are these bunch of smaller sectors like online food delivery, e-pharmacy, groceries etc. which are currently less than $1 billion but have huge headroom for growth," said the company.
(Edited by Manoj Sharma)