by Apurva Venkat

The wishy-washy journey of Flipkart and e-grocery segment

Nov 06, 2017
E-commerce ServicesMergers and AcquisitionsRetail Industry

Entry, exit, and re-entry: In a nutshell, it's the journey of e-commerce portal Flipkart in the e-grocery segment.

Indian e-commerce after much talk has finally re-entered the e-grocery segment with a soft launch in Bengaluru. The option to order grocery is open to only select customers in Bengaluru currently. The e-commerce portal has also put a cap on its minimum order of Rs 500, (which other competitors do not have) and will deliver free of cost for orders above Rs 1000.

The e-grocery segment has been gaining a lot of traction after 100 percent Foreign Direct Investment was allowed by food retail in June 2016. Flipkart global rival Amazon is set to invest USD 500 million in the segment. Indian players such as BigBasket and Grofers also pose competition to Flipkart.

E-Grocery segment at a glance

·       Amazon pantry and Kirana Now: Total investment USD 500 million.

·        Bigbasket: Total funding: USD 585,666,450

·        Grofers: Total funding: USD 180,303,392.

·        Shut down: Ola Store, Peppertap, Paytm Zip, LocalBanaya

Here’s a look at the journey Flipkart has had with the e-grocery segment:

October 2015: Flipkart started Nearby as a pilot in Bengaluru. Nearby was an app-based model that delivered groceries in Koramangala, HSR Layout, BTM Layout, Ejipura, Jayanagar, JP Nagar, and Bellandur areas of Bengaluru.

February 2016: Within five months of launch, Flipkart shuts its e-grocery deliveries option.  While the company did not specify the exact reason for shutting down the business, it said that Nearby had run its course of the pilot.

April 2017: Within months of Kalyan Krishnamurthy took over as the CEO for Flipkart Group, announced that the company would re-enter the grocery segment. Krishnamurthy had said the segment was worth USD 400- USD 600 million with 80 percent of the unit being bought in India belong to the grocery.

June 2017: Krishnamurthy said Flipkart was counting for mergers and acquisition to re-enter the segment. The CEO had indicated towards acquiring with a smaller company by saying that over time Flipkart has acquired companies smaller in size.  

November 2017: After various rumours floating across about when the Flipkart would re-enter the segment and whom they will merge with, The company confirmed on that it has made a soft launch in the segment. However, the same is currently available to select customers in Bengaluru. The company has said it plan to extend the services to the entire city and various other cities as well.