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Flipkart pilots grocery delivery service for the second time: report

E-commerce player Flipkart has decided to give online grocery delivery another try. According to this Business Standard report, the company has launched a grocery delivery service in Bangalore on a pilot basis. The report quotes Anil Goteti, head of marketplace at Flipkart as saying that more pilots of the service would be extended to other cities soon; he did not provide a timeline for a public launch. MediaNama has written Flipkart seeking more details about its grocery delivery pilot and will up the story once they respond.

This is Flipkart’s second pilot test in the grocery deliver space. It had shut down its earlier service Flipkart Nearby in February last year, nearly 5 months after its launch. The company had launched the service in October 2015 on a pilot basis, when the company delivered to the Bangalore neighborhoods of Koramangala, HSR Layout, BTM Layout, Ejipura, Jayanagar, JP Nagar, and Bellandur.

While shutting it down, a Flipkart spokesperson said the pilot ran its course and that it was run to understand efficiencies and operations of the hyper local business. The spokesperson added that “the learnings from this pilot will now be used for future operations of the company.”

Amazon’s online grocery services

It isn’t clear whether Flipkart will have an offline model for its grocery service, like its rival Amazon, but the latter has been investing heavily into India lately. Amazon recently received government of India’s approval to invest $500 million in the food retail segment. In April this year, the Department of Industrial Policy and Promotion (DIPP) had also approved Amazon’s plans to stock and sell local grocery produce online.

Amazon operates its grocery service online via Amazon Pantry, a service which delivers household items and grocery with presence in 34 cities . On the other hand, the grocery delivery service KiranaNow (Amazon Now), which was launched in Bengaluru last year, is currently available in Delhi-NCR, Mumbai, Bangalore and Hyderabad.

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It’s all about time taken to deliver the grocery

However, these services take time for delivery, and not all users are willing to wait a day to have their groceries delivered. One can simply step out to the local grocery store and take home fresh vegetables without having to wait. Amazon’s Pantry service guarantees next day delivery and charges Rs 20 per box as delivery charges. Through KiranaNow, Amazon delivers groceries within two to four hours.

BigBasket also has a same day delivery option, while Grofers provides option for same day delivery for certain orders. But same day deliveries are costlier: Grofer’s CEO Albinder Dhindsa had said last year that it had to shut down same day delivery for most of its orders and start delivering orders the next day to cut down on its losses. The company also started using 4-wheelers instead of 2-wheelers to help increase delivery capacity.

Shutdowns in online grocery space

  • In February 2016, PepperTap shut down operations in six cities: Mumbai, Kolkata, Chennai, Ahmedabad, Chandigarh, and Jaipur. It laid off about 400 delivery personnel. It has raised $51.2 million in 4 rounds of funding from at least 8 investors and acquired Bangalore-based hyper-local grocery delivery service Jiffstore.
  • In January 2016, Grofers shut down its services in 9 cities citing low acceptance. The company had expanded to these Tier II cities, including Ludhiana, Bhopal, Kochi, Coimbatore and Visakhapatnam in September 2015. Grofers, however, relaunched operations in Ludhiana, Bhopal and Kochi along with several other cities in January 2017 and is currently live in 26 cities.

Note: A spokesperson from Grofers told MediaNama that it had relaunched in some cities it shut down last year. We apologise for the error; the story has been updated with correct information.

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MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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