E-commerce platform Flipkart which will be introducing its hyper-local offering that guarantees deliveries in 15 minutes to its consumers is eyeing a 30 per cent penetration in tier-2 and tier-3 cities. Flipkart has launched its Iris platform which is targeted to assist brands with insights and feedback on their product offerings. Manjari Singhal, Head of Business, FMCG and General Merchandise at Flipkart spoke to businessline on the sidelines of the second Glam Up Fest held in Mumbai.
With the advancement in E-commerce penetration, what growth do you see for Flipkart? How has the Glam Up Fest helped in gaining new customers?
There is immense potential in tier-2 and tier-3 markets where e-commerce penetration remains low, hovering around 10 per cent in most FMCG segments. Our goal over the next five years is to increase this penetration to 30 per cent. To achieve the goal we will enhance relevance through personalisation, catering to individual needs, and addressing emerging trends—areas where online platforms excel.
Beyond beauty and personal care (BPC), trends like gourmet foods in baby care and educational toys in toys and Montessori learning are gaining traction. We are confident in our ability to achieve year-over-year growth upwards of 1.2 to 1.3x, reflecting a strong commitment to seizing the expansive opportunities ahead.
We achieved around 200-300 million impressions last year with the Glam Up Fest. Given this success, we decided to scale up significantly this year. Last year, we had about 300 influencers participating; this year, we have around 3,500. We had around 20 brands last year, this year we have between 70 - 80 online and offline brands showcasing their products. We aim to generate approximately 1.2 billion impressions today and in the next three to four months.
How is the growth in the rural market? Is there any demand uptick or changed customer trend in tier-2 and tier-3 cities?
Flipkart is observing growth in tier-2 and tier-3 cities ranging approximately from 1.3 to 4x, depending on the region. This growth aligns with our business metrics, where revenue is increasing by about 1.3 to 1.4x per customer.
We find it fascinating that the surge in ingredient-based searches is consistent across both metro and non-metro areas. Initially, this trend was more prominent in metros, but it has steadily expanded to tier-2 and tier-3 towns. Regime-based shopping is gaining prominence, where consumers are adopting comprehensive routines for both hair and skincare. This shift has influenced our product offerings, prompting us to introduce bundled packs that include items like shampoo, conditioner, and serums together. These packs simplify decision-making for consumers and enhance the overall shopping experience.
Overall, the trend towards regime-based shopping and the uptake in ingredient-focused products are driving our strategies to cater effectively to these evolving consumer preferences across different market segments. If we were to gauge the scale of the uptick, combo packs have seen nearly a 3x increase compared to last year. We’re actively curating new offerings and seeing continued growth in our existing products. Another trend we are seeing is a significant increase in repeat purchases.
E-commerce platforms face a threat from instant delivery services, what is Flipkart doing to address the challenge?
The demand for faster deliveries has been growing, prompting us to introduce our hyperlocal offering with guaranteed 10-15 minute delivery time. Compared to last year, our day one and day two delivery capacities have increased by 10x, particularly benefiting customers in metro cities. In the FMCG sector alone, we now manage to deliver nearly 1,00,000 products on the same day. Furthermore, we are significantly enhancing our supply chain capabilities to ensure quicker deliveries across all areas.
How will Flipkart hyperlocal be different from the instant delivery services?
We are just a couple of weeks or months away from its launch, but it is shaping up well. This expansion extends beyond our distribution network; it involves broadening both the scope and depth of inventory located closer to our customers. This strategic move enhances our ability to deliver predictably and swiftly. We are committed to further scaling this effort because meeting customer expectations, even for items that technically can wait, now hinges on faster delivery—an aspect we are dedicated to improving.
What is Flipkart Iris? How will it help brands grow?
It is a tool designed to help brands find insights on our platform and brands can see how their products and launches are performing, what kinds of searches are occurring, and how successful their advertising efforts are. They can also get recommendations on optimizing their advertising keywords and strategies. Iris offers insights into search trends, such as the growing interest in natural ingredients like rosemary and vitamin C. Brands can see the click-through rates (CTR) and conversion rates (CVR) for these terms, helping them decide what to focus on. Additionally, they receive real-time feedback.
If you launch an ad campaign or introduce a new product line, you gain insights into the types of customers you are attracting. This includes understanding their demographics, such as their socioeconomic status (SEC) and location, which helps in making strategic decisions. These insights also guide brands in optimizing their supply chains based on demand patterns. Overall, Iris provides extensive data, and it’s up to brands to choose and utilise the information that aligns with their objectives.