By Surya Suresh
India’s largest e-commerce retailer, Flipkart, is all set to expand its online groceries business in an attempt to cater to the booming food retail and FMCG markets. One aspect of this proposed expansion is an entry into the movie ticketing market.
Online groceries – The next battleground?
The online grocery market is a relatively new segment in India. Most families continue to purchase weekly groceries from ‘kirana’ or convenience stores, owing to their proximity and competitive prices. However, the past year has seen the rise of online grocery businesses such as BigBasket, Grofers and Amazon India.
However, this rise has been quite gradual as people appear to be unwilling to move away from convenience stores for weekly purchases. According to Livemint, the market research firm RedSeer Consulting Pvt. Ltd estimated it to be barely $1 billion in 2017. Analysts remain optimistic about the future potential of the online groceries sector owing to the high order volumes and repetitive purchases inherent to the grocery market.
Flipkart is preparing to expand its presence in the sector amid news of a proposed takeover of the company by American retail giant, Walmart. The company has ground to gain if it is to compete with the early movers, particularly Alibaba backed BigBasket.
Flipkart’s expansion plan
FMCG, consumables, food retail and movie ticketing are some of the markets that Flipkart is looking into at the moment.
The Billion brand was launched by Flipkart in 2017 to attract new users. The company’s founders are looking to expand the brand to include FMCG and consumables as well. As mentioned, the company also plans to enter the highly competitive online groceries business. Flipkart hopes that the sale of groceries will improve consumer retention, a perennial problem in the cut-throat online retail sector.
With regards to the movie ticketing market, there was speculation in 2017 about Flipkart buying a stake in BookMyShow but the deal never materialized. Reports indicate that the company is preparing to launch a service for selling movie tickets, but it remains unclear whether the company is aiming to launch a separate application for the same. BookMyShow currently dominates this market, with Paytm developing into a viable second option.
What does the future hold for Flipkart?
In the past decade, the e-commerce freight train has disrupted nearly every sector in India. The grocery sector is one of the few remaining bastions untouched by the e-commerce giants, but this will no longer be true. The financial power and end-to-end supply chains possessed by e-commerce giants like Flipkart and Amazon will enable them to invest billions of dollars to aid their efforts in this new battleground. It is certainly possible that these companies co-opt with convenience stores for last mile delivery owing to the high real estate prices in India and the latter’s knowledge of the local landscape.
With regards to Flipkart, most analysts believe that the company will struggle to keep pace with Amazon owing to the latter’s early entry into the market. They see Walmart as the only legitimate threat to Amazon in the retail market, thus making a speculation of Walmart’s takeover of Flipkart all the more interesting.
Stay updated with all the insights.
Navigate news, 1 email day.
Subscribe to Qrius