Flipkart plans to expand grocery business
2 min read . Updated: 02 Mar 2021, 11:19 PM ISTE-grocery has become the next big battleground for e-commerce firms with many players vying for market share
Bengaluru: Walmart-owned Flipkart on Tuesday announced plans to ramp up its online grocery service to 70 cities over the next six months from 50 at present.
The expanded network will allow Flipkart to provide customers in seven metros and 40 cities such as Kolkata, Pune, and Ahmedabad access to grocery products through the company’s dedicated grocery fulfilment centres.
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In markets beyond the top metros, the e-commerce company will serve customers through a satellite-expansion marketplace model.
E-grocery has become the next big battleground for e-commerce firms with BigBasket, Grofers, Amazon India, JioMart, and even Swiggy competing for market share.
The coronavirus pandemic has put the focus on the online grocery space, with the market pegged at $3 billion, as of last year, according to management consultancy Redseer.
The market has charted a compound annual growth rate (CAGR) of 57% and the online grocery business is expected to reach $18.2 billion by 2024.
With customers looking at digital channels for home essentials during the national lockdown, the gross merchandise volume for the online grocery segment in the country jumped 73% between January to June 2020, Redseer said.
“Grocery continues to be one of the fastest-growing categories, with the increase in demand for quality food and household supplies from users. In line with this, we have invested in scaling up our grocery operations across the country, strengthening ecosystem partnerships," said Manish Kumar, senior vice president, grocery, general merchandise and furniture, Flipkart.
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Grocery demand has surged over the past year in tier 2 cities, fuelled by growing customer preference for contactless shopping and the e-commerce company expects the trend to continue, Kumar said.
Flipkart’s grocery business grew threefold in the past year.
The e-commerce company claims to offer a selection of more than 7,000 products across 200 categories, ranging from daily household supplies, staples, snacks and beverages, to confectionery and personal care.
Flipkart’s grocery operations will also directly connect farmer producers to hundreds of thousands of consumers through the online marketplace, the company added.
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