Flipkart is getting into delivery of fresh vegetables and fruits, a vertical being eyed equally keenly by rivals Amazon and Reliance. The Walmart-owned e-commerce major has launched a pilot scale operation in the city of Hyderabad. Some of the existing vendors in its marketplace are reportedly assisting Flipkart in this venture. The company has already invested in Ninjacart, which should help with the strengthening of supply chain. Flipkart will eventually have its own mandatory approvals and licence to handle fresh fruits and vegetables. The company is keen on setting its internal processes in place before it operates in it. It will be in compliance with the FDI policy as well.
Flipkart is aware of the challenges in dealing with these products. Apart from the issues related to sourcing the fresh fruits and vegetables, there are regulatory matters to contend with. However, with the competition getting into the space, Flipkart could not hold itself back. The company has applied for a licence and till then Waycool Foods & Products would be handling the sales.
The business would also warrant setting up physical stores to sell vegetables and fruits. These stores will sell groceries too besides fresh fruits and vegetables. These may materialise over a period and not immediately.
The learnings from the pilot level operations in Hyderabad will come useful when Flipkart goes nationwide with its omnichannel strategy selling fresh products. The category is critical to the company as it is to Amazon and Reliance. These are products consumed by every household and with its vast market spread through the length and breadth of India, the prospects are quite enormous.
Walmart has taken full advantage of the FDI policy that permits 100% foreign direct investment in the food retail business and has floated a firm Flipkart FarmerMart, with an authorised equity capital of â‚¹1,845 crore.
Amazon has its Amazon Retail India, a separate entity to which Amazon has committed $500 million in investment. Reliance has its offline model Reliance Fresh and has now forayed online with its Jiomart and has started in a small way in Mumbai.
It cannot be overlooked however that BigBasket continues to lead the space in this category and will be challenged by all these powerful players.