Flipkart Goes Offline With Assisted E-commerce; Tightens Screws Around Quality

After taking on the mobile and internet world for the last 8 years, ecommerce major Flipkart is planning to build its offline presence. Under Assisted ecommerce model, Flipkart wants to touch the next million population which is not Internet or mobile savvy.

“This is targeted mainly at places where online shopping is still catching up. Customers in tier-3 and tier-4 towns have heard about online shopping, but are still circumspect,” Ankit Nagori, chief business officer at Flipkart told TOI.

Under this, the Bangalore-based unicorn (valued above $Bn) will set up offline stores in tier 3 and 4 towns. It is piloting the model with mobile retail chain Spice Hotspot and is in talks with eight to ten other offline mobile retail chains. It has already set up Flipkart experience centres inside 30 outlets, across 19 cities, of Spice Hotspot.

Flipkart has over 300 Mn customers who shop online. But as it is growing its base, it wants to bring more people to the platform, who are yet to adopt online shopping, especially in the mobile phone category. Once  customers visit the store, they will have an experience on how online mobile shopping could be as seamless and comfortable as offline shopping just at their fingertips. “This is going to be a big customer conversion tool for us in the smartphone category”, he added. According to Nomura report, mobiles contribute 65% of sales on Flipkart.

A lot of ecommerce players are getting into hybrid model of online-offline to increase customer base and attract more customers online. Last month, Flipkart’s rival Paytm launched its Fastest Expert Delivery (FED) program with MobileStore, wherein a product is expected to be deliver within two hour of receiving the order. It also introduced Quick Response (QR) code-based payments method on its platform to enable shopkeepers or service provider to start accepting digital payments via QR codes.  Other players like Store-King, iPay and eDabba are already in this space.

Improving Quality of Marketplace

In another move, it has blacklisted about 40 sellers that failed to adhere to the set quality of  Flipkart. These sellers were either selling fake products or committing delivery frauds. Flipkart has over 60,000 sellers on the platform. Last month, in order to improve the quality and curd the fraud cases, Flipkart set up a mystery-shopping network with 60 employees . Mystery shopping or secret shopping is a concept followed by external auditing and research firms, or internal department in a company to check on the processes and identify frauds in it. The team would build fake profiles as customers and place orders on behalf of Flipkart to see if the sellers are adhering to the guidelines.

Apart from selling fake products, the sellers are inflating the prices, or buying their own products to avail deep discounts.

“Whenever a product image is uploaded with an inflated MRP, our inbuilt image search algorithms can detect whether MRP recorded in database with the uploaded MRP varies a lot. If it does, an alert is sounded against the seller,” said Manish Maheshwari, VP and head of seller ecosystem at Flipkart to ET.

Flipkart has started this after cases of seller malpractices from Snapdeal, and Paytm too came into light. Recently, a buyer from Mumbai complained after receiving fake Lakme cosmetics from Flipkart, while a Paytm customer received stone tiles in place of a Lenovo laptop. A flipkart customer found loophole in their return policy and made Rs 20 lakh from it.

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