scorecardFlipkart Wholesale business woos mom-and-pop stores in tier-2 cities
  1. Home
  2. business
  3. corporates
  4. news
  5. Flipkart Wholesale business woos mom-and-pop stores in tier-2 cities

Flipkart Wholesale business woos mom-and-pop stores in tier-2 cities

Flipkart Wholesale business woos mom-and-pop stores in tier-2 cities
Business4 min read
Source: IANS
  • Apart from servicing retailers online, Flipkart Wholesale has 28 experience stores across 24 cities, where retailers can walk in, peruse the stock and purchase.
  • Its online offering enables retailers to access buy-now-pay-later and credit options with APIs integrated to its backend.
  • It has a special initiative for new-age and digital-first brands where they can take them to kiranas.
The Indian retail market is ruled by kiranas or mom-and-pop stores. Flipkart Wholesale, a branch of the e-commerce giant, is targeting them with an omni-channel approach.

Just like its e-commerce business, Flipkart Wholesale has a strong online offering where kirana store owners can order in bulk online and get it delivered in a day or two. But it also has two fulfilment centres and 28 experience stores across 24 cities, where retailers can walk in, peruse the stock and purchase — the age-old cash-and-carry business.

Then there is a third way to service retailers online too, Koteshwar LN, business head of Flipkart Wholesale tells Business Insider India.“We have a salesforce called Feet on the Street who visit stores and take orders, or help retailers place orders online. While Indian retailers are now very comfortable with UPI payments and more, there is still that generation that needs face-to-face interaction,” says Koteshwar.

Koteshwar, who spent over 15 years at Coca-Cola before joining Flipkart around four years back, is deeply connected with the retailers. Most retail stores are one-man businesses, and if a retailer has to go shopping either to a wholesaler or agricultural produce market committee (APMC) stores, most of them have to close down their kiranas for a few hours.

“With our online offering, retailers can browse at 8 PM in the night. That’s a convenience. We believe we can convert them to online fully, but that needs time,” he says. Moreso, it has also enabled retailers to access buy-now-pay-later options online, and work with banks, fintechs and more to offer them credit facilities — with APIs integrated to its backend.

Koteshwar L N_Business Head Flipkart Wholesale
Koteshwar L N, business head of Flipkart Wholesale

Advantage: The new-age brands

The business, which calls itself a digital marketplace, is a great believer in tech as it can offer things a normal wholesale business cannot – and that’s data. An APMC or other wholesale sale point is a push market where products are simply sold. Manufacturers do not know who is buying, how much is selling, what packs at what price points.

“But we give data back to the manufacturers (about) what is selling at our stores, which ones are going online etc,” he explains.

Those who need and use this ‘data’ and visibility the most are brands that are born online or digital-first brands. For such direct-to-customer or D2C brands as they are called, Flipkart Wholesale has a special channel initiative – it targets startups and other D2C brands that are well online but struggle with offline focus.

“We offer D2C brands very good distribution and the best possible rates. In fact, if a D2C brand comes to us and wants us to cover a region like Indore or Bhopal, we can manage it for them,” he says.

Most of the new-age brands are in the personal care segment, which has healthy margins. A recent Redseer report says that digital-first brands account for 25% of all the sales in the e-commerce pie, but are also rapidly expanding their business offline. Kiranas too are curious and very open to experiment with them — but as a rule, start small with small packages and move ahead to increase, based on the traction.

Margins, competition & growth

Flipkart Wholesale, which aims to achieve a good topline and bottom line growth simultaneously, is targeting high-margin segments within the wholesale business. It entered the general merchandise category covering cookware, luggage, small electricals and more — in 2021.

“General merchandise does better in-store than online and it has very good margins. Also, staples or essentials like grains etc form less than half of our portfolio – which has very less margins,” says Koteshwar.

In the last ten years, many large and international players entered the wholesale business with varying success. French major Carrefour came to India in early 2010s but shut its operations in 2014, which were then offline. Flipkart launched its wholesale business in 2020, also acquiring Walmart’s Best Price cash-and-carry business at the same time. Walmart is a majority investor in Flipkart Group, which also includes its e-commerce business.

The competition in this segment is also growing. Apart from online giant Amazon, Mukesh Ambani-owned JioMart, which also runs one of India’s largest retail chains, has acquired Metro Cash and Carry business. Metro, which has been in India since 2003, has 31 large format stores across 21 cities in India and is expected to bump up Jio’s presence in the segment.

The business is not without its challengers either. Startup and unicorn Udaan too has made its presence felt in the B2B business with its focus on online business.

“Many online players are focussed on the bottom line but not the topline, while many offline players, on the other hand, are focussed on the bottom line but not the topline. We know how to grow the topline and manage the bottom line,” says Koteshwar, adding the company’s business is profitable and sustainable, and does not burn cash – without giving any more details.

Moreso, Flipkart wants to target the Bharat that exists beyond big metros – with focus on smaller Tier 1 and Tier 2 cities. “We are not obsessed with metros. Slightly small cities are where the potential is. Most (FMCG) companies have maximum distribution in metros, and we can do better value add in Tier-2 cities,” explained Koteshwar.

Flipkart Wholesale wants to transform India’s retail ecosystem through a combination of new-age technology and traditional shopping experiences. It remains to be seen if the country’s mom-and-pop kirana stores will wholeheartedly embrace the changes on offer.

READ MORE ARTICLES ON




Advertisement