Flipkart Banks On Dark Stores To Boost Hyperlocal Play, Take On JioMart & Others

In a bid to take on Reliance JioMart, ecommerce giant Flipkart is setting up dark stores to expand its presences across the food and groceries segment.

A dark store is a small neighbourhood warehouse where consumers cannot enter directly and can only order online for a home delivery. BigBasket had first experimented with the dark store model in 2018. In India, dark stores have primarily been small warehouses or neighbourhood fulfilment centres serving the objective of on-demand fast deliveries primarily in a D2C (direct to consumer) model.

You can read more about the advent of dark stores and future prospects in India Inc42 ‘‘The Hyperlocal Conundrum: Kiranas Vs Dark Stores In India’s Retail Market Post-Covid’ report. The model was popularised in the US by players like Walmart (Flipkart’s parent), JCPenney and clothes with the advent of ecommerce.

According to an Economic Times report citing sources, Flipkart will be setting up nearly a dozen such small storage facilities in Delhi initially. The fast-moving goods will be frequently supplied to such small storages from the fulfilment centres outside of the city, a source added.

Without confirming the report, Flipkart spokesperson added that the company continues to invest to enhance their capabilities to deliver value for sellers and consumers. “With regard to our hyperlocal capabilities, we will be expanding to six additional cities in the coming months with a focus on a 90-minute delivery model for a handpicked assortment of products,” the spokesperson said. The company had also expressed these expansion plans while launching its hyperlocal service, Flipkart Quick.

Flipkart Quick will allow the customers to get their deliveries within two hours of ordering. For the first phase, Flipkart will be facilitating the sales of 2,000 products across several categories — grocery, fresh, dairy, meat, mobiles, electronics accessories, stationery items and home accessories. It will also be onboarding neighbourhood or kirana stores onto its network, the company had announced.

The quick service will give a slight edge to Flipkart over its competitors across segments like Amazon in ecommerce; BigBasket, Grofers and JioMart in grocery delivery; and Google-backed Dunzo and Swiggy Genie in hyperlocal deliveries. While there is no doubt that Amazon is Flipkart’s biggest competitor, but JioMart is also gaining momentum rapidly.

JioMart recorded 1 Mn downloads on Google Play Store within the week of its listings, and is now the third most downloaded shopping app after Amazon and Flipkart, respectively. Reliance’s chairperson and managing director Mukesh Ambani, during the 43rd annual general meeting (AGM), had revealed that delivering close to 2.50 Lakh orders daily across 200 cities. Looking at this, the company plans to expand its product offerings to include electronics, fashion, pharmaceuticals and healthcare products.

In an attempt to grow stronger in the food and groceries segment Flipkart has also acquired Walmart’s B2B wholesale store, Best Price Modern Wholesale, to launch its own service ‘Flipkart Wholesale’. Now the company is finding ways to consolidate its operations. According to media reports, Flipkart may shut down unviable ‘Best Price’ stores, of which there are 28 operational across the country, or turning them into warehouses with a greater focus on ecommerce operations.