A business which doesn’t expand means that it’s dying. Stagnation is the antonym of progress, and Flipkart understands this fact.
After a lackluster growth in online sales this year (except festive day sales, fuelled by discounts), Flipkart has decided to expand their frontiers via offline route. This new program of going from online-to-offline, has been internally named as ‘assisted commerce’. As per reports emerging Flipkart will soon launch offline retail outlets across remote areas of India, including Tier 2/3 cities.
Interestingly, Flipkart is also forming a lobby to fight offline traders who are against the very concept of online retail, and have grouped with other online retailers and portals.
Myntra, which is owned by Flipkart, has already launched their first physical store.
Flipkart’s engineering chief Ravi Garikipati has already confirmed the development, as he said: “Basically we want to have some sort of a connect with the offline world as well—this is one of our upcoming initiatives, but it’s not something that’s out there yet. As we are looking ahead and trying to grow the market and win over the next 3-5 years, there are a few things we need to do..”
This is certainly not the first time Flipkart has thought of offline push. Last year, they launched ‘Experience Zone’ across urban locations where users can touch and feel products before ordering them. Such zones also worked as collection centers, and they witnessed substantial traction there.
However, the new offline push is targeted for remote areas, where ecommerce has failed to penetrate due to various issues (which includes slower internet speed); and Flipkart doesn’t want to miss such a huge market, which is atleast 5 times that of online retail market in India.
Amazon has already launched their first physical store in US, and in India, they launched their first offline presence in 2015.
Flipkart’s Online-To-Offline Strategy
Mint reports that Flipkart has partnered with StoreKing, which is India’s biggest rural ecommerce company, having a massive presence across 10,000 rural outlets in 1200 cities of India.
Their modus operandi is simple: They install a tablet at local kirana store in villages, and then lure customers visiting these stores to browse through their 80,000+ products. Once payment is completed, the kirana store owner receives 6-10% commission on the products sold, and the customer receives regular updates via SMSes on his/her mobile phone.
StoreKing is mainly concentrating in Southern India, as they have a huge warehouse in Bengaluru, and promises to deliver all items within 48 hours.
Amazon India has also partnered with StoreKing to offer the benefits of online retail via offline medium.
Recently, Urban Ladder also expanded into offline mode, after Pepperfry opened their physical outlet last year. Lenskart too opened their physical outlet way back in 2014.
Big Bazaar and Paytm has already collaborated to form a massive online-offline coalition.
Is going offline the ultimate path for online retailers in order to expand and increase numbers? Or their strategies would fail infront of existing offline players?
Can online retailers like Amazon, Flipkart be able to infuse enough funds into capital-centric offline retail?
Do share your opinions by commenting right here!