In an exclusive interaction with TOI, Krishnamurthy said Indian e-commerce used to be more of a big city, affluent user phenomenon. “But today, platforms like Flipkart have a huge percentage of transacting customers coming from tier-2 and -3 cities. And as that happens, there’s a huge movement from branded to unbranded products. There’s also a big movement away from traditional product catalogues like books, smartphones and branded devices, to unbranded fashion, beauty care, home and general merchandise. About 4-5 years back, 50-60% of customers were from the top 10-15 cities. Now, the non-top 10 cities account for 60%,” Krishnamurthy said.
He said the cost of doing business will be higher as you go deeper into the country. Creating the necessary suppliers and building logistics networks will be expensive. “But that’s also where cost efficiency and highly automated tech come into play in a big way and we start to see the benefits of scale,” he said.
Flipkart has placed newer bets on travel, grocery and healthcare. Last year it acquired the travel portal Cleartrip, and online pharmacy SastaSundar. In December, it invested, along with Walmart, $145 million in Ninjacart, a supply chain company for fresh produce. Krishnamurthy said each of these areas is seeing big investments, and he expects all of them to benefit from Flipkart’s massive user base, as also contribute to that base.
Flipkart’s kirana delivery programme, which began in 2019 with 27,000 kirana partners, has doubled the number of partners it has onboarded each year – 50,000 in 2020, 1 lakh in 2021, and over 2 lakh this year.
Asked about the company’s proposed IPO, Krishnamurthy said currently it’s not top of mind for him. “We should just focus on scaling up the business and improving the experience rather than focusing on an IPO,” he said.
Krishnamurthy expects kiranas to play the central role in grocery commerce. While quick grocery commerce has attracted a lot of attention with players like Swiggy’s Instamart, Reliance-backed Dunzo, Blinkit and Zepto upping their game, Krishnamurthy said India is less of a convenience-seeking country and more of a value-seeking country. “Quick commerce is a smaller business and relevant to a select segment in the country. That’s not what 80-90% of the country is seeking. From where we are, we forecast the kirana ecosystem to be disproportionately the more meaningful influencer in that market. One of our own strategies is how we can partner with the kirana ecosystem to scale up the groceries business. In the next 4-7 years, they will contribute a significant part to grocery commerce in India,” he said.
Flipkart, which is about to launch its Big Billion Day annual sale, recently revamped its consumer app, upgraded its typography, iconography, layouts, animation and navigation, and colours to reduce visual clutter, and improve the overall readability of the content. Some of the newly introduced capabilities include the Brand Mall mode, which when activated will show only branded products. It has introduced image search, where customers can take a screenshot of an outfit or item they are looking for and upload the same on the app.
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