Walmart’s Flipkart is speeding up expansion of its “quick commerce” business in India, with plans to add 500 more neighbourhood warehouses across the country with a focus on smaller cities as it competes in the fast-growing $11 billion sector.
The push comes just as Flipkart, which competes with Amazon in e-commerce, is preparing for its Mumbai listing, though a timeline is not yet fixed.
Flipkart was a late entrant to the quick commerce space that has boomed in India and sees companies home delivering everything from iPhones to chocolates to milk within 10-30 minutes from neighbourhood warehouses – a phenomenon that has reshaped shopping patterns in the world’s most populous nation.
While Eternal’s ETEA.NS Blinkit has over 2,200 stores in India, and Swiggy’s SWIG.NS Instamart has more than 1,100, according to data from Datum Intelligence, Flipkart on Tuesday said its store count has touched 1,000, but it plans to take it to 1,500 within months.
The company is focusing more on smaller towns and cities, with 70% of its 130 plus city footprint coming from those areas, Kunal Gupta, head of Flipkart quick commerce service “Minutes”, said in an interview.
People in smaller cities “build a slightly larger” average order value basket as they are value conscious, Gupta added, saying it has expanded aggressively in the eastern state of Bihar – one of the nation’s poorest regions.
FIVE VARIETIES OF AVOCADOS
E-commerce is a popular shopping medium in India, but quick commerce is fast catching up. However, India’s government in January ordered companies to stop promoting their grocery deliveries as a “10-minute” service amid rider safety concerns.
While Flipkart didn’t disclose numbers, it said in a press statement its orders have grown five times in the past one year, with smaller towns and cities recording 42 times higher sales.
In Bengaluru, Flipkart’s offerings now extend to five types of avocado to cater to evolving urban tastes, while in smaller cities the focus remains on staples and essentials, Gupta said.
Datum Intelligence data showed Blinkit was already servicing 3 million orders per day and Swiggy was doing 1.25 million, with Flipkart lagging with 820,000 daily orders.
The average order value of Flipkart service was however highest at 700 rupees ($7.39), the data added.
Datum’s founder Satish Meena said it would be difficult for Flipkart to take share from Blinkit, where customers look for convenience and are from high income households.
($1 = 94.7350 Indian rupees)
Reuters
