BL interview. AI to drive sale of beauty and personal care products: Kanchan Mishra, Flipkart

The e-commerce penetration of the beauty and personal care and FMCG category in India stands at 10 per cent, whereas in the US and China is at 50 and 60 per cent. A lot of our first-time application users come through beauty and personal care and FMCG categories because it is very less penetrated. They drive retention on the platform and are not single-use categories. We see these categories grow in the e-commerce journey that India will travel. Larger e-commerce is expected to grow at 25 per cent CAGR over the next five years, and beauty and personal care will grow higher because of the under-indexed e-commerce penetration that we have. 

We have 500 brands working with us in the beauty space and more than 10,00,000 listings. We are working on creating an immersive technology experience for the products. Last year we launched virtual try on and saw heightened traction. This year we are launching Skin Analyser — Indians use just four beauty products when compared to 22 products used by consumers in Japan. The Skin Analyser is an immersive tool where consumers can take selfies and the skin is analysed with AI parameters and recommends products suited for your skin problems. A person in Tier 2 that does not have access to product knowledge will now know which is the right brand, the right shade that will be accessible at the fingertip. We believe it is going to be revolutionary for skincare in India.

We have been using AI in various formats as recommendations are personalised based on customers’ behaviour and search pattern to feed the right and relevant content. Our catalogue images leverage AI to gauge the quality of the product that has been uploaded by the seller. AI enables us to throw the right preferences with affordability to consumers. We are getting into the next stage of AI, where it becomes educational, participative, and informative to customers.

50 million of the e-commerce shoppers Flipkart acquired during the pandemic came from Tier 2 and Tier 3 cities. We currently have 180-190 million shoppers on the platform. We realised that the customers that are new to e-commerce seek validation, trust and information, and they do not want to go through the usual way of product description and catalogue information. That is when we introduced the concept of influencers, and last year we experimented with 400 of them. One of the campaigns was only focussed on micro-influencers and regional influencers from Assam, Manipur, Gujarat, and so on. We saw more than 1.5x conversions as a result of our engagement with the influencers. There are higher basket sizes and higher retention and customers return less because they make an informed purchase that has been influenced by the influencer.

The expansion in FMCG will be based on adding new products and brands. Last year, we launched 400 new products. We do a lot of co-creation with the brands, a lot of brands started with just one product, but the insights we have on what customers are looking at enable us to work with partners in filling up white spaces. Our brands have expanded into multiple categories from where they have started which gives more options to customers. 

We are addressing all the niche requirements of the consumers.

The Indian market has a lot of white spaces across the board, which differentiates the bottom of the pyramid and the more affluent widely. Even in product categories, families used to have only one shampoo despite having different requirements. We are now getting into a space where everyone uses their customized products and these white spaces need to be solved. E-commerce , D2C partners as well as global brands are growing and scaling fast, thanks to the insights provided by E-commerce. The cycle of innovation has become very fast. 

D2C brands have grown 3X for Flipkart, and we expect the growth to continue in the same way. India is under-indexed in the D2C portfolio that we have when compared to global benchmarks. The agility that they work with helps us grow and helps them grow very fast.