New Delhi: Walmart-owned Flipkart on Tuesday announced the launch of its hyperlocal delivery service 'Flipkart Quick' starting with Bengaluru, a move that will further intensify competition with rival Amazon and other players in the segment.
The service, which will enable customers to receive items like grocery, fresh vegetables, meat and mobile phones in 90 minutes, will be available in select locations in Bengaluru initially and be gradually scaled up to six other cities by the end of the year, Flipkart Vice-President Sandeep Karwa told PTI.
"...everything which we expect our neighbourhood departmental store to carry is all what we made live. Along with this, we've also announced the launch of our fruits and vegetables, and meats category...we've created a storage space where we've enabled a lot of our sellers to store their inventory," he added.
Apart from Amazon India, the move will also pitch Flipkart against Mukesh Ambani-led Reliance Industries Ltd's e-commerce venture JioMart, Alibaba-backed Bigbasket and Softbank-backed Grofers in the online grocery segment.
Online grocery delivery has gained significant traction amid the COVID-19 pandemic. Offline retailers, who have taken a major hit on account of the lockdown, are also keen on partnering with digital platforms to facilitate delivery of goods. In the past few months, Flipkart has partnered with retail chains like Spencers and Vishal Mega Mart to enable hyperlocal deliveries of groceries and essentials in various cities.
According to a recent report by Goldman Sachs, India's e-commerce business is expected to grow at a compound annual growth rate (CAGR) of 27 per cent to reach USD 99 billion by 2024, with grocery and fashion/apparel likely to be the key drivers of incremental growth.
The report said Bigbasket and Grofers accounted for more than 80 per cent of the online grocery segment in 2019 but projected that Reliance Industries would capture half of the online grocery sales with the help of its partnership with Facebook. JioMart plans to use Facebook's WhatsApp to connect local grocery stores with customers.
On competition in the hyperlocal delivery space, Karwa said Flipkart is offering a complete package.
"It's not a logistics solution or just a marketplace solution, it's a full complete package that ensures that the right sellers and right logistics partner are in place. Also, our larger differentiation is going to be the quality of products that we deliver...while we are not the first ones to do this (hyperlocal delivery), but I am hoping that we are the first ones to do it right," he added.
Interestingly, Flipkart had last week announced the acquisition of Walmart India's cash-and-carry business in the country.
Karwa said in the future, the company will also partner with chains of local stores in various cities that focus on quality and service standards.
Flipkart , which had recently raised $1.2 billion funding from a Walmart-led group, will also leverage its partnerships with companies like Ninjacart and Shadowfax for the service.
"We start today in Bengaluru with Shadowfax as our partner and they are going to deliver these products in 90 minutes. We are going to also enable Ekart (Flipkart's logistics arm) to be a partner. Eventually, we also believe that there will be some offline store partners who might say whenever there is an order within the vicinity from my store, I can do that job," he said.
Many players, including Flipkart, have tried the 90-minute delivery model in the past but have not been able to scale it.
"It's not an easy problem to solve. We wanted to ensure that the experience is consistent and that the unit economics is playing out well. There is a very strong tech which we have deployed using which we believe we will be in a position to do it consistently...and we believe that unit economics is something which we should be able to solve," Karwa said.
Flipkart Quick will provide consumers with an assortment of more than 2,000 products in categories varying from grocery, fresh produce, dairy, meat, mobile phones, electronics accessories, stationery items and home accessories in the first phase.
Consumers can choose to order in the next 90 minutes or book a 2-hour slot as per their convenience, and the orders get delivered between 6 am to midnight with a minimum delivery fee of Rs 29.
Flipkart Quick will debut in Bengaluru in select locations, including Whitefield, Panathur, HSR Layout, BTM Layout, Banashankari, KR Puram and Indiranagar.