Flipkart Plans to begin selling groceries from the second half of this year, sources said, entering a line of business which is crowded but also regarded as an attractive one for online retailers. The service, most likely to be launched as an in-house offering rather than through an acquisition, will put the Bengaluru firm in direct competition with specialist portals such as Big-Basket, ZopNow and Local Baniya as grocery retail emerges as the latest front in the battle for leadership in India’s fast-growing online retail industry.
“We already have the technology, warehousing and the brand, so most likely we will do this in-house in the second half of this year,” a person with knowledge of the firm’s plan told ET.
Flipkart declined comment for this report.
When it launches a grocery retail service, Flipkart will be following in the wake of rivals Amazon and Snapdeal, which have a head start in the segment. Last week, Amazon India said it is launching an express delivery platform in partnership with mom-and-pop stores, calling it Kirana Now. The company is currently running a pilot programme in Bengaluru.Snapdeal tied up with gourmet food retailer Godrej Nature’s Basket in January to sell about 400 of its products online, with orders delivered the next day.
Experts are of the view that online grocery will become one of the top three most attractive segments for online retailers, after electronics and apparel.
“In the next six months, we will see online vertical players, horizontal players as well as offline players coming online to sell groceries,” he predicted. The India Brand Equity Foundation estimates that food and grocery accounted for 69% of India’s $490-billion (Rs 300-lakh crore) retail sector in 2013, followed by apparel at 8%.
According to people familiar with Flipkart’s expansion plans, the addition of groceries on its portal is part of a larger strategy to include newer categories and business lines that will help boost revenue and chalk up profits.
It Seems interesting but don’t you feel these decisions will make it difficult for small business to grow.