Flipkart, Amazon Establish New Retail Networks Ahead Of Ecommerce Battle With Reliance

With each passing day, India’s leading ecommerce companies are revealing another layer of their hybrid or omnichannel model, which blends online shopping and offline retail. Walmart-owned Flipkart has taken multiple steps in the past few weeks in an attempt to gain a leg up on its biggest rival Amazon and to tackle the entry of Reliance in the Indian ecommerce market.

The Bengaluru-based company is introducing a ‘Flipkart Authorised BuyZone’ programme, in metros Tier 2 and 3 cities, where customers can get assistance for shopping smartphones, large appliances and consumer electronics goods during the festive season.

Flipkart will also train sales staff at this network of almost 10K general trade stores in almost 700 cities across 20 states in helping customers create Flipkart accounts, and choose the right products and help in payments and deliveries.

Earlier this week, Flipkart added 27,000 additional Kirana stores to its offline retail network to scale up its reach in Tier 2 and 3 cities and towns. Flipkart’s Allocation Engine will help automate allocation of shipments to the partner Kirana stores. Flipkart claims this tech is essential for high-speed deliveries to consumers and offers flexibility to merchants.

Further under the BuyZone programme, Flipkart’s partner stores can also facilitate the delivery of products in some cases. Flipkart says the initiative will help store owners gain additional revenue, while also removing the basic barriers for new customers, especially in smaller towns.

Earlier in September, Flipkart bosoted its pan-India reachability by adding 800 additional cities and towns to its service map. The ecommerce marketplace had initiated a ‘The Reach Project’ in February this year to bring Tier 2 and Tier 3 cities on its service-delivery map. Being an Indian company, its objective was to bring thousands of new sellers, MSMEs, domestic manufacturers and artisans into the ecommerce fold.

More than 60K sellers from small cities and towns will be benefiting from the expansion as it comes ahead of the festive season. The platform has got vendors from Uttar Pradesh, Bihar, Tamil Nadu, Telangana, Jammu and Kashmir, Assam and Tripura on board, who will gain maximum benefits of the expansion project.

Flipkart Targets Next 200 Mn Users

To bolster its Tier 2, 3 play, Flipkart had also announced a Hindi interface for users who primarily use the internet in Hindi. The interface will also be expanded to various other local languages to make the consumer experience more seamless and convenient, as the company looks to target the regional language user base. The company claimed it’s part of its long-term strategy to reach the next 200 Mn internet users.

Last month, Flipkart had also invested $30 Mn in logistic startup ShadowFax to improve its doorstep delivery. The Bengaluru-based startup connects delivery executives to ecommerce companies, among others to provide a simpler and quicker delivery solution. In addition to doorstep delivery, Flipkart had also introduced its doorstep repair service along with its Complete Mobile Protection (CMP) plan.

Ecommerce Game Moves Offline

Even as Flipkart has been aggressive in its attempts to expand its reach in Tier 2 and Tier 3 cities, Amazon is also moving in the same direction.

The US tech giant’s 49% stake purchase in Future Coupons last month is a big part of its moves for the offline market. The company is in talks with three retail chains — Future Group, retail chain More and Shoppers Stop— to sell a range of Amazon products offline. Amazon is a stakeholder in all three retail store chains.

Amazon would be starting its offline venture by bringing its AmazonBasics private label and apparel brands Prowl and Just F through a network of 2K stores with these partners. Eventually, it plans to expand the catalogue by including the bestselling products from its marketplace.

The company is also enabling customer pickups at four railway stations across Mumbai. The initiative will be launched as a pilot in CSTM, Thane, Dadar and Kalyan.The company said that kiosks have been placed in high foot traffic locations inside the station that provide easy accessibility and better convenience to Amazon customers who want to pick up their packages on their way in or out.

Reliance Entry Spurs On Amazon, Flipkart

While the omnichannel strategy could have been part of the long-term plans for both Amazon and Flipkart, they have been accelerated over the past year thanks to Reliance’s mega announcement at the 2018 Annual General Meeting. RIL Chairman Mukesh Ambani said Reliance would tap its network of over 5K Reliance Jio stores to enable last-mile delivery and retail experience, with an ecommerce platform enabling online shopping and payments.

The company could launch a ‘Super App’ offering with over 100 services integrated such as paying bills and buying tickets through in-app payment services.

Here’s what we know so far:

• Ambani had said that the ecommerce plan will be beneficial to consumers, retailers and producers and will also help about 3 Cr small shopkeepers across the country.
• The company is expected to follow a hybrid model. Under this plan, the company is aiming to creating shared profitability by integrating offline stores of small retail players within its online platform.
• Reliance Retail was looking to foray into B2B ecommerce, offering smartphones, televisions, garments, spices and soap to retailers.
• Reliance will enable deliveries and discovery through approximately 12 Mn Kirana stores
• Reliance Retail had shared plans to use more than 5,100 Jio point of sales stores across 5,000 cities and towns as delivery and collection points for its ecommerce venture.
• Reliance withdrew lifestyle products including apparel and footwear from soon-to-be rival marketplaces i.e. Amazon and Flipkart.