Flipkart Leverages Shadowfax Investment; Takes On Dunzo With Hyperlocal Delivery Services

Walmart-owned Flipkart is looking to go hyperlocal way, taking on Dunzo as well as Swiggy Genie hyperlocal delivery model.

The company is said to be launching a separate business vertical to cater to 90-minute delivery of goods from local stores and its own small fulfilment centres. The company will reportedly begin with groceries, but going forward plans to execute deliveries of consumer goods, medicines, from nearby stores under a separate brand name, according to an ET report.

Flipkart is said to be leveraging the last-mile capabilities of its recent investment of $60 Mn in logistics startup Shadowfax to facilitate its entry into the segment. The report added that Flipkart will start deliveries from its own dark stores, or local warehouses and select shops, but over time it will expand that to corner stores and modern retailers within a select neighbourhood. The hyperlocal service will be first launched in Bengaluru and is likely to be a one-city pilot till October.

On the grocery ecommerce front, Flipkart expanded its SuperMart offering last year to many cities, but it still couldn’t achieve the traction to compete with Bigbasket and Grofers. Recently, Kalyan Krishnamurthy, CEO of Flipkart said, “We will very gradually expand it to more and more cities as and when we have the right value proposition for the customer and a lot of it will also be done through partnerships with the ecosystem.”

Its grocery delivery service SuperMart has been unable to take off against well-set competition like BigBasket and Grofers.  Further, during the lockdown, Dunzo has tapped into massive growth with up to 33% growth in its weekly orders and a massive spike in average ticket size, savings per delivery and number of orders fulfilled per hour. The number of weekly orders has gone up from 2.1-2.2 per user before the lockdown to 2.8 weekly orders during the lockdown. The average ticket size for orders has more than doubled from INR 220 prior lockdown to INR 480 now.

Similarly, Swiggy expanded Genie hyperlocal service enabling users to order items from local stores and send parcels to each other. Hence, with Dunzo’s tried and tested success in the hyperlocal space, along with Flipkart’s capability to burn cash, its entry into hyperlocal space is expected to fuel consumer services business in India.