Flipkart Wholesale is experimenting with dark stores and hub & spoke model (a network of Flipkart Wholesale partners) to expand the business, Koteshwar LN, Business Head, Flipkart Wholesale, told businessline.
“We are also working on something called an alternative channel for online-only brands. We believe that there are a lot of smaller companies, who don’t have offline presence. They are very good in direct-to-consumer channel but they struggle because they don’t have an offline presence. We can provide distribution to these brands without them having to be present in that region,” he added.
Talking about the company’s experiment with the hub and spoke model for delivery, Koteshwar said Flipkart Wholesale typically does not deliver to retailers who are 100 kilometers away from its offline stores. “Anything more than 100 km is not very feasible, financially. So, we are coming out with a model where we will have some partners called Flipkart wholesale partners. Some of the bigger retailer will start becoming like hub and spoke for us and will help us sell our products further to the distant retailers. We have already piloted this model in a few places,” he added.
Business consolidation
While the company is experimenting with multiple models, Koteshwar said none of these models will be scaled this year, as the company plans to consolidate its business in 2023 and figure out a sustainable growth strategy for its B2B business.
“We are doing all these experiments, getting the learnings from them, and then we will figure out how best to target a particular market that we are present in and can we really operate without having a in-store at all,” said Koteshwar. Flipkart Wholesale is a business that Flipkart took over from Walmart. Under Walmart, it was known as Best Price and had a network of 28 offline store for retailers to shop products.
Koteshwar also said that the broader B2B ecosystem is under a lot of stress in the ongoing funding winter. “Some of our competitors have doing half of the topline which they were doing earlier and the bottomline is stressed. This is the time when you have to consolidate business and see the changes that are happening out there in the market. This is the time to not react but to ensure that we make our business very sustainable and then start thinking about growth. So our growth projections are expected to only start from next year onwards,” he added.
Financial performance
Flipkart Wholsale (Flipkart India Private Limited) clocked a net loss of ₹3,404 crore in FY22, which was 39 per cent more than ₹2,445-crore loss recorded in the previous year. This was against a revenue of ₹51,176 crore in FY22. While Koteshwar did not disclose the financial projections for FY23, he said the company has recorded growth over the past year and is heavily focused on profitability.