Having raised over $4 Bn in funding, 2017 was undoubtedly a revival and a reckoning year for the Indian ecommerce behemoth Flipkart. “The focus will now be on increasing the monthly active consumers from the existing 10 Mn to take to 80 Mn in the coming years,” said Flipkart CEO Kalyan Krishnamurthy while speaking to financial newspaper ET.
In the last year, despite an uncertainty over the team-lead, Flipkart successfully cracked a number of deals such as $4 Bn fundraise from Microsoft, Tencent, eBay and SoftBank. Flipkart also sold its 5.4% stake to eBay in order to acquire their India operations, eBay India.
Calling 2017, “a revival year of confidence in the Indian consumer internet industry” Kalyan averred, “We have seen a very big confidence boost. The ecosystem in India is now very clear that there is a market leader in India in ecommerce with a huge margin…..They have (Tencent, SoftBank, eBay, Microsoft) synonymised growth in the Indian internet market with Flipkart.”
“In categories like fashion, both branded and unbranded, home, mobiles and appliances, which account for over 80% of ecommerce in India, Flipkart has a 75-80% of the share (along with Myntra),” claimed Kalyan Krishnamurthy.
With a huge fundraising, Flipkart has been in discussion with other players like food marketplaces Zomato and Swiggy, event platforms like BookMyShow, to expand the horizon of its ecosystem to counter Amazon’s Prime offerings. The services will supposedly be offered as part of Flipkart First offerings, however, the company has not been able to pull any significant deals in this regard and deals are still in the stage of speculations. One of the reasons behind the delay is understood to be the dilution of stakes. Flipkart, as part of the collaboration, wants to attain a significant stake in the other platform to influence their decision making in sync with the Flipkart ecosystem. While independent platforms like Deepinder Goyal-led Zomato are open to collaborating, aren’t apparently interested in the diluting their stakes.
On, what’s in the cart of Flipkart this year, Krishnamurthy stated that the prime focus will now be on how to increase the number of monthly active customers who are actually transacting on the platform. Flipkart is currently eyeing to the have its own bigbasket and food marketplace to multiply the monthly active users significantly.
“The biggest thing that we are shaping for is how do you shape customer behaviour to buy a bigger basket. The second thing that we are shaping for cost advantage in that category because it is a low average selling price category in India,” added Krishnamurthy.
While Flipkart is yet to roll out its strategies on the ground, the rival ecommerce behemoth Amazon has already enabled a host of offerings which include grocery marketplace Amazon Now and Amazon Pantry, movie tickets, bookings using Niki.ai chat services, food offerings, payment solutions, and most important the Prime entertainment services which has increased the consumer spending by manifold.
Amazon recently enhanced the Prime membership annual fee from the initial offering of $9.4 (INR 599) to $15.7 (INR 999) with a cashback of $7.85 (INR 500) on Amazon Pay. The company has also announced plans to launch Prime Music in the Indian market, which is already very popular in the US market.
Connecting IMDB which is again an Amazon-owned movie database with Prime offerings, Amazon has an easy access to rank all the shows it offers.
Committed to taking Flipkart to new heights, Krishnamurthy stated that the company will aim to increase its monthly active customers by a bare minimum of 2.5x. However, the bigger question is will that be enough considering the significant rise of new players in the space like Paytm and Tata Cliq. Backed by big corporates, both have a capacity to develop their own ecosystem that would pose a new challenge to both Flipkart as well as Amazon. That will be certainly an added challenge for the Flipkart CEO Kalyan Krishnamurthy.