Flipkart & Online Grocery?

Flipkart & Online Grocery has become one of that “will they/won’t they couple” and a lot of tech-enthusiasts are waiting for this holy union to happen.

Maybe COVID-19 will finally bring them together.

Flipkart recently applied for a License to sell agricultural produce of Indian Farmers to run Flipkart FarmerMart. Though the application was rejected by the Department for Promotion of Industry and Internal Trade (DPIIT).

A Flipkart spokesperson also told Business Insider that they are evaluating the authority’s response and intend to re-apply soon.

But on the contrary, Flipkart CEO Kalyan Krishnamurthy said “We will not change our long-term growth strategy or category mix focus after the Covid-19 Outbreak” in his recent interview with Economic Times.

Kalyan Krishnamurthy further says that even though grocery is a value proposition, it just covers 0.1% of Flipkart’s marketplace. Meanwhile, Walmart stated that limited operations of it’s Flipkart business in India have negatively affected growth for a portion of the quarter.

Covid-19 has deeply impacted the other main source of business- Fashion and retail as visits for the entire segment is reduced to 20% of what it was in 2019.

Data Source- Impact of COVD-19 on India Online Fashion and Retail Segment Report, SimilarWeb.

Whereas, the Online Grocery market has seen an unprecedented rise and witnessed the 4X surge in visits to Online Grocery websites.

Data Source- Impact of COVD-19 on India Online Grocery Segment Report, SimilarWeb.

This makes sense for Flipkart to explore options in Online Grocery Segment and it is possible that we will see some developments in the near future. 

This will be the second attempt for the tech giant to make an entry in this space though conditions now seem to be more favorable.

“There are three models for grocery. One is a daily purchase, the average selling price (ASP) there is very low at about Rs 300-400. Then there is a weekly business model, which is a bit higher. Thankfully, 60-70 percent of the market is the third one which is a monthly basket where the average is about over Rs 2,000. With those, its a very sustainable business,” Krishna had said earlier about selling groceries online.

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Impact of COVID-19 on India Online Fashion & Retail Segment
Impact of COVID-19 on India Online Grocery Segment