Ecommerce giant Flipkart has launched 20 centres across 10 cities in India, in conjunction with its logistics partner Ekart, where users can pick up their products from. Flipkart said that it ventured into this supply chain because some of its users were unavailable during delivery time, other than the restriction of entry for delivery boys in IT parks, gated communities and educational institutions.
Not just an offline pick up point: Neeraj Aggarwal, senior director of delivery operations said that Flipkart plans to offer value added services like instant returns, spot trials, open box deliveries and product demos to the centres in the near future. Flipkart plans to establish 100 such centres by March 2016. The company also plans to expand its rural reach (Tier IV towns) by reportedly making the town servicable from a pick up centre.
Flipkart claims that it had carried out a pilot of the offline zones, with reportedly 80% shipments being picked through the stores over a period of 6 months. However, it did not disclose where the pilot was held or how many people used the service.
Flipkart’s focus on mobile and apps:
Seller Hub app: Last month, Flipkart launched an Android app for sellers called ‘Seller Hub’. The app let sellers get alerts on new orders, update stock count and pricing on listings and monitor payments and return. It also offered notifications when orders were placed, with monitoring of payments and returns.
Appiterate acquisition: In April, it acquired the mobile marketing startup Appiterate for an undisclosed sum. According to Flipkart, the deal would strengthen its mobile technology platform, in line with its ‘Mobile First’ focus. Post acquisition, Appiterate’s mobile marketing automation platform would be integrated into Flipkart’s mobile app, which would help Flipkart target users based on their activity on the app and website.
Mobile website shutdown: Note that Flipkart and Myntra shut down their mobile websites in March, redirecting users to Google’s Play Store and iOS’ App Store to download the application. Myntra claimed that it generated more than 90% of its traffic and 70% of its orders from its mobile app, while Flipkart claimed over 70% of its traffic came via the mobile app.
AdIQuity acquisition: In March, Flipkart bought mobile advertising firm AdIQuity for an undisclosed amount. One part of the business would involve external marketing, where brands could use Flipkart data on user behavior to target customers on the AdIQuity platform across publishers. The second part would be in internal marketing where the AdIquity platform would be used to allow merchants to promote their products on Flipkart.
While this might seem like an interesting idea to a hassle free road of picking up shipments for the consumer, going offline for an online business has not been profitable. Also, given the company’s stress on mobile, we don’t see how this move will turn out to be profitable or the point of it, but that’s where the money burn comes in. We don’t see the method to the madness. Why does Flipkart want to add the cost of real estate to its business?
Offline retailers, on the other hand, have time and again complained that although users check out products offline, they ultimately buy them online, where the products are cheaper. So how is that being factored in?
Jeevansathi’s offline centres: In 2009, we’d reported Hitesh Oberoi, COO of Info Edge as saying that they had 14 offline centres in all and had not added any in last 4 months since they were trying to get the model right. Breaking even was also a concern at that point of time. Oberoi said “Competition continues to be challenged for cash and capital, and this is helping us improve our position in the marketplace.” In 2010, Oberoi said that, “We are not looking to open new centers at this point in time.” As of 2013, it had 14 centres which would provide matrimonial services like registration, profile shortlisting and match selection to non-internet savvy customers through two different packages – 3 months priced at Rs 2,990 and 6 months priced at Rs 4,750.
Also read: Flipkart: A timeline
Image Credit: Flickr user Sankarshan Mukhopadhyay