SUMMARY
Amid heightening competition in e-grocery space, Flipkart targets Tier 2 and Tier 3 cities.
The grocery arm of Flipkart operates 22 grocery fulfillment centers, spread across 25 Lakh sq. ft. area.
A report estimates the Q-commerce market to grow to $1 Tn by 2025, led by metro and Tier 1 cities.
E-commerce marketplace, Flipkart, has announced the expansion of its grocery services to 1,800 cities across India. With this, Flipkart Grocery will now deliver across 10,000 pin codes in 23 states.
The startup will now offer its services to an array of new destinations including Tie 2 and 3 cities such as Ajmer, Amritsar, Bhuj, Bokaro, Daman & Diu, Dehradun and Kanyakumari, among others.
Commenting on this development, Flipkart Grocery vice president, Smrithi Ravichandran, said, “The e-grocery market continues to see increased demand as consumers from tier 2 and 3 markets will get access to high quality selection of staples and household items from reputed brands at great value. We are committed to bringing this shopping experience to consumers all over the country, as we strengthen our selection, invest in FPOs and fresh produce, and scale up our supply chain.”
The move is part of the startup’s renewed focus on its grocery business, which is booming across the country. This startup says that it has made deep investments in its grocery business in the last two years. The grocery arm of the startup operates 22 grocery fulfillment centers, spread across 25 Lakh sq. ft.area
The move is also part of the grocery platform’s pivot to smaller cities and towns to cater to the growing users in these regions. This was evident during last year’s ‘The Big Billion Days’ event when customers from nearly 200 new cities made their first grocery purchases on the platform.
Launched in 2007, Flipkart Group is one of India’s leading digital commerce entities. It includes group companies such as Flipkart, Myntra, Flipkart Wholesale, Cleartrip and a majority stake in payments app PhonePe.
A RedSeer report estimates that the e-groceries segment grew by about 75% in the lockdown period. Add to this, the quick-commerce market is expected to grow to $1 Tn by 2025, led by mid to high income households in metro and Tier 1 cities.
The expansion comes at a time when Flipkart Grocery faces stiff competition from its rivals including BigBasket, Amazon, BlinkIt (formerly Grofers), JioMart, among others.
This combined with hyperlocal delivery has effectively heightened the competition in the sector wIth everyone vying for a piece of the quick commerce market.
Earlier today, Swiggy achieved the decacorn status after raising $700 Mn in new funding led by Invesco and a clutch of other investors. WIth this, Swiggy is now valued at over $10.7 Bn.
Earlier this month too, Reliance Retail picked up a 25.8% stake in quick commerce startup, Dunzo, by investing $200 Mn. Inc42 estimates that this helped Dunzo’s post-money valuation jump to nearly $775 Mn.
Barely a year old, grocery delivery platform, Zepto, also raised around $160 Mn last year within a span of five months of its launch.
Tata Digital too acquired a majority stake of 68% in BigBasket in May last year. The Tatas are now building a unified super-app platform which will feature a plethora of services including e-grocery, all under one roof.
The funding galore only goes on to show that investors have huge confidence in the sector. With many startups eyeing the hyperlocal market, it is only imperative that Flipkart too enters the space but whether it will succeed, only time will tell.
