Flipkart to woo festive shoppers, eyes 80% share of large appliances market

The company says it has begun raising stock levels for higher demand during upcoming sales

Flipkart, the country's largest e-commerce marketplace, says it would aim at an 80 per cent share of the large appliances segment in the e-commerce space. The new focus is part of its effort to grow categories that yield higher margins.
 

The company says it will woo festive shoppers to purchase large appliances on its platform, via a heavily improved delivery and installation service. In the country's top 13 cities, Flipkart will offer next-day delivery and installation, a capability it has apparently built over the past few months.
 

"The Large Appliances category on Flipkart has been steadily growing, with continuous surge in demand from customers all over the country. Through this revamp, we have significantly beefed up our supply chain," said Sandeep Karwa, segment head at the company.
 

Flipkart says it has begun raising stock levels for the significantly higher demand it will see during the upcoming sales. It now has nine dedicated warehouses across the country for large appliances, along with a specialised last-mile delivery team. The company has also partnered with several appliance manufacturers for facilitating of installations.
 

It isn't the only company to target the high-margin large appliances market. Global rival Amazon has seven specialised warehouses in India for storage and handling of such appliances. As both companies increasingly come under the scrutiny of investors, they're looking to move away from driving the bulk of their gross merchandise value to mobile devices and into other categories.
 

While Amazon uses the money it makes from profitable business units abroad to invest in its India business, losses from its international business soared to $724 million in the quarter that ended on June 30. The majority of this money, it had said in previous quarters, goes towards its business in India.
 

Today, around half of all sales on both platforms come from smartphones, which yield margins under four per cent. Further, given the competition, e-tailers often undercut the cost of these devices to woo buyers to their platforms.

Categories such as furniture, large appliances and fashion are now being seen as viable replacements to drive sales, while earning higher margins.
 

While Flipkart's fashion units, Myntra and Jabong, continue to lead the market, the company has begun focusing on other segments, including launching its own private labels. Amazon has much the same idea. This could lead to a price war, say observers.