Flipkart's Shopsy eyes largest grocer tag, rolls out services in 700 cities

Shopsy would leverage Flipkart's grocery supply chain infrastructure and tech capabilities to provide consumers access to an expansive range of products to over 5,800 pincodes

Flipkart’s social commerce platform Shopsy, has started offering grocery as a category on its platform. Leveraging the Flipkart Group’s supply chain infrastructure and tech capabilities, Grocery on Shopsy will cater to consumers across 700 cities, spanning over 5,800 pincodes. Grocery on Shopsy will host over 6,000 products across 230 categories - ranging from staples, FMCG (fast-moving consumer goods), and other dry groceries; matching the selection and range available on Flipkart Grocery.

The move is expected to help Flipkart take on rivals such as Amazon, Reliance’s JioMart and Tata-backed BigBasket to tap the grocery market which is expected to be worth $850 billion by 2025, according to the analysts.

“Over the last six months Shopsy has become one of the top social commerce platforms in the country,” said Prakash Sikaria, senior vice president - growth, Flipkart. “Grocery is a key consumer  need and we are committed to making e-grocery affordable for  consumers and sellers alike.”

With grocery on Shopsy, users can now shop for value groceries by adding and checking out products in their cart or by combining orders for multiple individuals in their network. Users can avail of a  flat 5 per cent commission margin that will directly be credited to the linked bank account as well as enjoy up to 50 per cent savings.  In order to bring the safest and high-quality grocery products to its pan-India consumers, Shopsy further ensures stringent quality control across its fulfilment centres and Grocery supply chain.

“We have been working on reducing the cost of delivering groceries over the last few months. We are happy to announce that we have achieved best in class cost structure which makes us confident of scaling groceries on Shopsy,” said Sikaria. “Our core focus will be to bring benefits of community commerce to  Indian consumers. We believe this model can solve challenges  such as small ticket buying, assisted buying and instant delivery leveraging resellers who act as a conduit between us and  end-users.”

Shopsy hit the $100 million mark of the gross merchandise value (GMV) in October this year on the back of festive sales and it has set a GMV target of $1.5 billion by the end of next year.

Flipkart’s Grocery fulfillment centres including those in Ahmedabad, Bengaluru, Chennai, Coimbatore, Delhi, Hyderabad, Kolkata, Lucknow, Mumbai, Patna and Pune will be leveraged by Shopsy. These centres have fully digitized processes and product quality checks. These centres have implemented effective quality management systems to ensure the products are traceable from raw materials until they reach the consumer, without losing their freshness.

Shopsy was launched by Flipkart in July this year, with the aim to make digital commerce accessible across India through a zero-commission marketplace. Shopsy has helped local and small businesses and women entrepreneurs adopt social commerce by simply reaching out to their trusted network of people on common social media apps. Shopsy has over 2.5 lakh sellers on the platform who provide 150 million products across over 250 categories and is on track to enable over 25 million online entrepreneurs by 2023.

According to a recent Bain & Company report titled “How India Shops Online 2021”, social commerce is set to democratise e-retail, with three in five social shoppers coming from tier-2 and smaller towns. Tapping into this opportunity, Shopsy has expanded its presence in tier-2 and 3 cities such as Bathinda, Barpeta, Gandhinagar, Morena, Mandla, Muzaffarnagar, Raipur, Sri Ganganagar and Saharanpur during the festive period. It is unlocking the potential of digital commerce for under-served consumers.

Backed by festive fervour, the platform has seen 3.6x growth in app downloads, crossing the 10-million mark on the Google Play Store, within five months of launch. But Shopsy is not alone. In the area of social commerce, it is competing with the likes of SoftBank-backed Meesho, BulBul, GlowRoad, Mall91, simsim and DealShare.

With a vision to enable 100 million small and medium-sized businesses (SMBs), including individual entrepreneurs, to succeed online, Meesho is democratising internet commerce by bringing a range of products and new customers online.

DealShare is known for pioneering the community group buying (CGB) model in India. The model is handy for millions of customers of tier-2 and tier-3 cities and rural India, who are yet to benefit from e-commerce and can potentially empower millions of retailers, too. DealShare has reached $600 million in gross merchandise value (GMV) annual run rate (ARR), over 1,200 pin codes and 60 cities in three years.

Udaan, India’s largest business-to-business (B2B) e-commerce company, is eyeing the grocery market and is focusing on community grocery e-commerce (CGE) to tap the sector growing sharply in the pandemic.

Bengaluru-based Udaan has launched Price Company for CGE, an app that uses the firm’s relationship with small retailers, community influencers and customers to enable e-commerce on a mass scale.

Community Group Buying (CGB) is a popular trend in China, which has one of the highest e-commerce uses in the world. Large players such as Pinduoduo, Meituan, and Didi are competing with each other to tap this market.