Flipkart’s grocery business is set to exceed the estimated industry high of 70 per cent YoY growth in 2020, backed by a three-pronged strategy, a top executive told BusinessLine .

The e-tailer’s grocery business Supermart, which was launched in 2017, witnessed a phased launch across five cities including Bengaluru, Chennai, Hyderabad, Delhi and Mumbai.

Online grocery is positioned to be the next bastion of growth for e-commerce firms driven by the significant shift to online shopping during Covid, and is expected to cross $18 billion by 2024, as per RedSeer Consulting estimates.

“Grocery is the next biggest frontier in online shopping, it constitutes 70 per cent of retail in India, and sees 30-35 transactions per customer per annum. From that perspective, it will always be a hotly contested category. While the industry is growing at a very fast rate, Flipkart will grow at much higher than industry rates, fuelled by Covid trends of customers preferring contactless shopping from the comforts of their home, a trend we think will continue. Even in pre-Covid times, both online and offline grocery were competitive markets and it will continue to be like that now and in future,” said Manish Kumar, Vice-President – Grocery at Flipkart.

Robust supply chain

Asked how Flipkart plans to achieve higher than industry growth in the face of a fierce fight from Amazon and Reliance Retail’s JioMart, which is all set to begin with the first festive season sale (Big Billion Days) this weekend, Kumar said, “The way to stand out in the grocery business is to solve for three things. First, we have to provide customers with a native, intuitive shopping experience which allows them to build a shopping basket with multiple items. Second, in order to deliver 15-20 items to the customer on time and in full, one has to build a very reliable and robust supply chain.

“Third, we have to provide a large selection from 150-200 brands in a city including regional grocery brands. We have to solve for all three things, and solve it better than competition does. Our on time, in full rate has been excellent at above 98 per cent, so we are confident of doing a very good job.”

App-in-app experience

Flipkart has built an app-in-app experience and voice-enabled shopping for groceries. Customers will also receive data backed, personalised recommendations for what else they could buy. A dedicated supply chain for groceries, from the fulfilment network till the last mile has been set up. All the 5 master cities have dedicated fulfilment centres, which also caters to satellite cities like Mysore, Warangal, Alwar, Agra and Aligarh.

“To ensure quality in packaged foods, we make sure to deliver products with the right shelf life, through a lot-managed inventory system wherein, what is first in is first out. We have built an elaborate back-end ecosystem to delivery quality staples by procuring from multiple local farmer organisations, sorting and grading them (managed by our franchisee partners) and packaging it as our private label offering - Flipkart Supermart Select. We have launched new Supermart Select staples such as pulses, spices, rice, flour and sugar along with home care products such as agarbatti, air fresheners, aluminium foil, toilet paper, kitchen rolls, paper napkins, cereals, detergents, toilet cleaner, among others,” said Kumar.

Big Billion Days sale

On the increase in average order value expected during Big Billion Days sale, he said, “Our units per order varies from 13-16 items depending on customer segments. During the lockdown our Grocery basket size saw a 2X to 3X increase vs pre-Covid and customer acquisition rates increased to 150 per cent during the lockdown compared to pre-Covid levels. The festive season will see an additional boost.”

Supermart offers next day delivery and the recently launched hyperlocal delivery service - Flipkart Quick will deliver in 90 minutes. Flipkart also offers ‘buy now pay later’ for customers who are eligible and open box deliveries where you can return it to the delivery person and get refunds in 0-2 days.