Flipkart could be planning a move into the video streaming space

• Flipkart is said to be in talks to purchase a sizeable stake in Hotstar, according to a report in Mint.
  
• As a sector, video streaming in India is poised for a fast pace of development over the next few years as mobile subscription and internet prices fall and data speeds increase.
  
• In July, Flipkart partnered with Hotstar to launch a video advertising platform called Shopper Audience Network.
  

It seems that Flipkart’s strategy to counter Amazon’s advances in India is to try and become Amazon. While the two companies might be fierce rivals in the e-commerce segment, Flipkart has so far remained absent in the digital content and video streaming space - which is currently contested by the likes of Netflix, Hotstar and Amazon with its Prime Video Service.

However, that might be set to change. According to a report in Mint, Flipkart is said to be in talks to purchase a sizeable stake in Hotstar as part of a plan to attract more consumers to its website. The reports follow the launch of Flipkart’s loyalty programme, which is in the vein of Amazon’s Prime Membership service.

As a sector, video streaming is poised for a fast pace of development over the next few years. With mobile subscription and internet prices dropping lower and speeds accelerating, more and more people are watching content online. According to PriceWaterhouseCoopers, a consultancy, the over-the-top content space is expected to nearly triple to $823 million by 2022.

A prior relationship

Flipkart already has a relationship with Hotstar. In July, the two companies partnered to launch a video advertising platform called Shopper Audience Network. The platform will facilitate the targeting of personalised advertisements from brands listed on Flipkart’s website. Flipkart will use its treasure trove of user data to direct ads towards customers consuming content on Hotstar.

Flipkart also offers Hotstar’s services to subscribers of its loyalty programme, Flipkart Plus. Hence, buying a stake in Hotstar seems like a natural extension of the Indian e-commerce major’s push to popularise its membership service. Content production is seen as a significant growth area and could prove crucial in attracting customers to Flipkart’s programme. The company was reported to be in talks with Netflix earlier this year regarding a potential partnership. However, it seems that nothing amounted from the discussions.

Diversification a priority

Backed by the deep pockets of Walmart, Flipkart seems to be focussing on the diversification of its core operations. Aside from video streaming, it is also eyeing a move into the financial services space. In July, it also applied to the Reserve Bank of India for a licence to commence operations as a non-banking financial company (NBFC). It wants to start offering insurance products and flexible financing options to the buyers and sellers on its platform.