To Compete Reliance, Flipkart Teams up with Kirana Stores

Key Highlights

Walmart-owned Flipkart is aiming to go after the same strategy and utilize kiranas and small neighborhood stores for expanding their businesses.

Flipkart’s strategy is to involve 15,000 small convenience stores, beauty parlors, bakeshops, and medical pharmacies, including others to sell a product that they usually don’t stock, such as smartphones.

Flipkart is piloting a project in Telangana state, where it has partnered up with almost 800 small shop owners to market mobile phones through the Flipkart application.

Following Reliance’s introduction new hybrid online-offline model to charge into the e-commerce section, Walmart-owned Flipkart is also aiming to go after the same strategy and utilize kiranas and small neighborhood stores for expanding their businesses.

Flipkart’s strategy is to involve 15,000 small convenience stores, beauty parlors, bakeshops, and medical pharmacies, including others to sell a product that they usually don’t stock, such as smartphones. Flipkart is piloting a project in Telangana state, where it has partnered up with almost 800 small shop owners to market mobile phones through the Flipkart application.

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The company ships the phones to the stores from where the orders are placed, and later the shop owners deliver it to the customer. Through this process, the small shop owners will be earning a retailer’s margin. More than 95% of retailing in the nation still occurs due to brick-and-mortar stores. The competition is increasing exponentially on the Indian E-commerce platforms with Reliance arrival later this year.

According to the sources, the pilot project is making revenue of 15-20 Crore per month. With the success of this project, Flipkart is planning to replicate the same model around the country. The e-commerce giant is targeting to generate more sales of other products through these stores and is also aiming to utilize them as last-mile delivery agents.

Another E-commerce fashion giant called, Myntra, had leveraged around 9,000 brick-and-mortar stores in 50 cities for deliveries through the ‘Mensa Network’ programme that was introduced in 2017. Nevertheless, this is the first time Flipkart group is teaming up with small shop owners to expand their market.

Flipkart’s competitor Amazon has a programme called ‘I Have Space’, where almost 20,000 stores are connected in 350 cities around the nation. These stores are used to make last-mile deliveries within the radius of 2 to 4 km of the stores. Different from Flipkart, Amazon doesn’t take orders through these shops. Meanwhile, Reliance is looking forward to raising the bar through its hybrid model.

Related : Walmart owned Flipkart in talks to buy Bengaluru-based grocery chain Namdhari Fresh

Asia’s richest person and Reliance owner, Mukesh Ambani, announced that the Reliance Retail and Jio Infocomm will in partnership launch a new E-commerce platform. The E-commerce strategy will be advantageous to retailers, producers, and consumers and will also assist other 30 million small shop owners across the country.

The new entrant, Reliance Retail, is aiming to raise its omnichannel play incorporating offline and online selling place, where Kirana stores are expected to play a vital part. Reliance Retail has stated that it offers to register millions of momand-pop shops as delivery agents.

Reliance is also planning to provide a platform where goods and services can be offered and obtained through online and offline sources. Although the products will be dispatch to the doorstep, buyers will have the chance of carrying orders from Reliance’s network of shops or the outlets of its last-mile delivery partners.

Similarly, Kishore Biyani’s Future retail also replicates the hybrid model and also announced the launch of its retail 3.0 business model known as, ‘Tathaastu’. The model operates on a merged system of digital brick and mortar stores.

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