In the highly competitive online retail space of India, Flipkart is now reportedly going to focus on groceries and furniture. The move is aimed at take on its rival Amazon to become the market leader, and perhaps also take on other individual retailers in the respective segment.
During an interview with Reuters, Flipkart’s CEO Binny Bansal said that building a profitable grocery business is hard but that doesn’t mean its not possible. The company is planning to start experimenting with grocery space from next year and will scale-up operations over the coming three years.
However, Flipkart isn’t the first major eCommerce player in the market to jump into the grocery space. Amazon India has already started its pilot project which focuses on delivery of groceries. And keeping these bigger ecommerce players apart, there is BigBasket, which has been doing extremely well since a long tjme, with some blazing customer reviews.
It will be interesting to see what strategy Flipkart adopts for this new endeavor, given that the company had earlier shut down its hyperlocal delivery service named Nearby. Several smaller startups who tried to make it big in this segment also shut down, despite raising significant rounds from big shot investors.
Binny further says that fashion will remain Flipkart’s best-selling category for the next few years, but he sees online groceries as having the potential to grow as big as fashion and electronics in the next six to eight years.
However, what’s more surprising is the company’s plans to focus on the furniture category. The furniture store will be relaunched in the coming months, with ramped up selection and experience, says Binny Bansal.
It is a surprising move because the established players in the segment — Pepperfry and Urban Ladder, are now setting up their own brick-and-mortar stores for growing the business.
But if the company is focusing to do something, it is very much capable of turning things. It once planned to become the marker leader in the online fashion space, and now we all know the result.
To be the market leader in the fashion space, Flipkart bought Myntra in 2014. Earlier this year, it has acquired struggling fashion portal, which was once the leading fashion and lifestyle store online — Jabong for just $70 million.
With two biggest online fashion portals coming together, Flipkart virtually owns the fashion and lifestyle segment online, with more than 15 million monthly active users. The platforms have over 30+ exclusive global brands. Myntra is also all-set to launch its first ‘highly tech enabled’ offline store in Bangalore.
Amazon India is also focusing on the fashion and lifestyle category, as it is the category that can provide high margins. Hence, the company has launched its own fashion label for men – ‘Symbol‘ and is planning to launch six private labels.
During the interview with Reuters, Binny Bansal said that the company would consider going public in the next 2 to 4 years. But, he refrained from specifying the market to go public. He said that they could consider India as well as overseas market for going public.
Since the beginning of the year, things have been rough for Flipkart. It went through re-structuring a couple of times, and then a series of valuation markdowns. However, it seems that the year will end on a good note for the company. It has won the ‘battle’ of the festive season sale against its rivals Amazon and Snapdeal, with record breaking sales.