SUMMARY
This marks Flipkart Supermart’s entry into its fifth market
Flipkart Supermart is banking on its USP of free delivery on orders above INR 600
The company is working with farmers, producer organisations and businesses in Mumbai for this service
Ecommerce giant Flipkart has launched Flipkart Supermart in Mumbai. This makes Mumbai the fifth market for the company’s grocery arm following the launch in Bengaluru, Chennai, Hyderabad and Delhi.
According to the company, it expects to collaborate with farmers, producer organisations and local micro, small and medium enterprises (MSMEs) to create a sustainable ecosystem and also generate jobs.
In a blog post, the company has also said that as a part of this launch, Flipkart Supermart will provide free delivery on orders above INR 600. Manish Kumar, head of Grocery at Flipkart said the business has grown “phenomenally over the last year,” and that this is the right time for for a Mumbai launch.
Flipkart has also set up a separate supply chain for groceries in Mumbai which includes fulfilment centres and a last-mile delivery network.
Flipkart’s Focus On Grocery Vertical
Flipkart had forayed into the online grocery segment with its Supermart in August 2018. Initially, the service was available only in Bengaluru. It started a pilot for Supermart in Bengaluru with a minimum order amount of $7.72 (INR 500) and free delivery of orders above $15.45 (INR 1000)
Under this service, Flipkart offers grocery products such as staples, FMCG and dairy products. It also offers products under a private label offering.
Last year, it was reported that the ecommerce company is looking to invest $264 Mn in its grocery vertical over the next three years.
Flipkart has been exploring ways to strengthen its business amidst the new ecommerce policy draft. Recently, it was reported, the company is exploring a hybrid online-offline model with an aim to sell smartphones through 15K convenience stores, beauty salons, bakeries and pharmacies.
Currently, Flipkart is piloting a project in Telangana where it has partnered with around 800 stores to sell smartphones through the Flipkart app. Under this scheme, Flipkart delivers the phones to the stores from where the orders were placed. The Kirana stores then deliver the products to the customers thus earning a retailer’s margin.
Earlier this month, Flipkart was in talks to acquire Bengaluru-based grocery chain Namdhari Fresh to expand the offline reach and boost its grocery delivery business. Walmart had held talks with Namdhari, but the acquisition will be made through Flipkart.
Online Grocery Market In India
A Goldman Sachs report predicts that the Indian online grocery market is estimated to reach $40 Mn (INR 270 Cr) by FY19, growing at a CAGR of 62% from 2016 to 2022.
Most recently, Gurugram-based online grocery startup Grofers raised nearly $60 Mn in a fresh Series F funding round from Masayoshi Son-led SoftBank Vision Fund (SVF).
Also, Bengaluru-based hyperlocal startup BigBasket is close to completing its $150 Mn funding round with sizable investments from Chinese ecommerce giant
Amazon which had suspended its grocery services due to new FDI in ecommerce regulations had also reopened its Amazon Pantry services in February offering select food products, such as cookies and tea, in New Delhi and Mumbai.
Last year, cab-hailing company Ola was speculated to leverage its 125K food delivery riders from its food delivery unit, Foodpanda, for grocery fulfilment.
