NEW DELHI: As Reliance Retail prepares to roll out its “new-commerce” multi-channel retail play by bringing millions of kiranas or small neighbourhood stores on board, Walmart-owned Flipkart is also courting them in a big way.
To begin with, Flipkart plans to make 15,000 small convenience stores, beauty salons, bakeries and pharmacies, among others, sell something they normally don’t stock: smartphones. It plans to push other products in future, and also use these stores as last-mile delivery agents.
The ecommerce giant is currently piloting a project in Telangana, where it has partnered with about 800 small shopkeepers to sell mobile phones through the Flipkart app. The company ships the phones to the stores from where the orders originate, and the kiranas in turn deliver them to the buyers, earning a retailer’s margin, said two people familiar with the development.
“The shops use a separate affiliate link in the Flipkart app to conduct business,” said one of the persons.
“There is a larger play with kiranas,” the second person said, without elaborating on the plans.
Flipkart did not respond to an email seeking comments.
Though deep-pocketed ecommerce companies have made major inroads into India’s retail sector over the years and have cornered billions of dollars worth of business, more than 95% of retailing in the country still happens through brick-and-mortar stores.
Competition is expected to intensify in the Indian ecommerce space with RIL’s entry later this year. The Mumbai-based conglomerate is also trying to loop in small and big physical retailers for its platform.
Pilot Project Generating Rs 15-20 crore a Month
The first person quoted earlier said Flipkart’s pilot project in Telangana is generating Rs 15-20 crore of monthly revenues, and the company now wants to replicate the model nationwide.
He said the initiative could be a win-win for both Flipkart and small retailers as it opens up new business avenues for mobile phones while the shopkeepers make additional money by hawking these to customers.
Flipkart’s fashion unit Myntra has been leveraging about 9,000 brick-and-mortar stores in 50 cities for deliveries under its ‘Mensa Network’ programme that was launched in 2017. However, this is the first time the Flipkart group is partnering with small store owners to sell products.
Rival Amazon has a programme — called ‘I Have Space’ — where about 20,000 mom-and-pop stores in 350 cities are used for last-mile deliveries within a radius of 2-4 km of the shops. However, unlike Flipkart, Amazon doesn’t accept orders through these stores.
Reliance Retail, which is planning to roll out its omnichannel play combining offline and online outlets, is looking at kiranas to play a central role. RIL has said it proposes to enroll millions of momand-pop outlets as delivery agents.
Reliance plans to offer a platform where goods and services can be offered and purchased through online and offline routes. While products will be delivered to the doorstep, customers will have the option of picking up purchases from Reliance’s network of stores or the outlets of its last-mile delivery partners.