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Flipkart to cross-sell ecommerce, advertising services to its top-selling merchants and larger brands

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Ever exploring new avenues of generating profits, Flipkart has hit upon the idea of selling its services and its customers to some of its largest clients. The clients here include top-selling merchants and brands with a plenitude of money upon their hands — who actually be willing to put in money into customer centric research.

The brand new strategy is courtesy Flipkart CEO Binny Bansal, who took over as the company’s CEO in January. Not only does he want to sell Flipkart’s commerce, supply chain and advertising services to it’s clients — that is, the companies that use the Flipkart platform to sell their wares –but he also wishes to establish Ekart, the company’s logistics arm, and Flipkart’s payments business as independent brands catering to business clients.

However he did agree that for such an event to happen, Ekart — and also Myntra — will have to start generating profits first, while the relatively new, payments will have to increase in scale.

Speaking on the topic, Binny told the Economic Times,

We are focussing on cross-selling. There is a lot of overlap. We have seen brands using our services from across the board. For example, Samsung is using our advertising platform, they sell on Flipkart, and, hopefully in the future, we will power their supply chain.

However, services are not the only thing that Flipkart is offering to its clients. In this increasingly data centric era, when more and more companies are using data analysis techniques while formulating their business strategies, Bansal also wants to leverage Flipkart’s huge, registered customer base of 75 million by selling insights to merchants upon who and where their top customers along with the kind of products they actually want.

The reason behind this new strategy is quite obvious. True, Flipkart does have significant amounts of money from it’s previous investment rounds, stored up. However, the company, which faced a string of markdowns recently from some of its top investors, needs to prove its mettle — and opening up several brand new avenues that have the potential of becoming self-sustaining, profit generating units, will bring Flipkart that much closer to its goals.

The move will also help the company stay on top of competition, such as Amazon, which has been aggressively expanding in the country. While for companies, relevant data upon their customers will help them streamline and optimize their sales, customers will be able to chose the best out of a set of available choices.

Meanwhile, Flipkart is also struggling with the new FDI guidelines which prevent a company from accounting for more than 25 percent of a company’s sales. WS retail for example, accounts for over 35 percent of the total sale from the platform, something which is a no-no under the new set of guidelines. Also, considering that the guidelines have disallowed online marketplaces from directly or indirectly influencing sale prices — using investors money to offer discounts for example — Flipkart has been asking merchants to collaborate with it on prices. For example, brands were asked to reduce their margins during its latest Big Shopping Days sale on May 25-27.

In an environment that has gotten rather less conducive to online marketplaces of late, and with backing from investors who, after years of seeing their money being used to offer discounts have drawn their purse strings tight, Online platforms are going to have to buck up to stay afloat and on top. As such, Flipkart’s brand new strategies seem to be a move in the right direction.

A bibliophile and a business enthusiast.

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