Flipkart plans to expand grocery services to over 70 cities in six months

Flipkart on Tuesday said it plans to expand its grocery services to more than 70 cities in the next six months as the Walmart-owned company looks to cash in on the burgeoning e-grocery segment in the country.

Flipkart, which competes with US e-commerce major Amazon and billionaire Mukesh Ambani-led Reliance in the country's digital commerce space, has expanded its grocery services to more than 50 cities, including Kolkata, Ahmedabad and Vellore.

This expansion will provide users of seven large cities and more than 40 neighbouring cities access to high-quality grocery products, offers, quick deliveries and the most seamless grocery shopping experience, Flipkart said in a statement on Tuesday.

The pandemic has led to millions of people turning to e-commerce for their grocery purchases that has driven the sharp growth in the e-grocery not only in metros but also from tier II cities and beyond.

E-grocery is projected to grow to touch USD 24 billion GMV (Gross Merchandise Value) by 2025 from about USD 3.3 billion in 2020, as per consulting firm RedSeer.

Players like BigBasket, Grofers and others too compete with giants like Flipkart, Amazon and Reliance in the e-grocery segment in the country.

In its statement, Flipkart said it has invested in the rapid expansion of its grocery services over the years and has managed to scale up "exponentially" in the past year.

"This expansion has brought the convenience of Flipkart's grocery service to users of metro cities such as Kolkata, Pune and Ahmedabad, with the help of Flipkart's dedicated grocery fulfillment centres... Flipkart Grocery has witnessed 3X growth in the last one year," it added.

Flipkart has also expanded its services to cities beyond the metros such as Mysore, Kanpur, Warangal, Allahabad, Aligarh, Jaipur, Chandigarh, Rajkot, Vadodara, Vellore, Tirupati and Daman, through a satellite-expansion marketplace model.

"Grocery continues to be one of the fastest-growing categories, with the increase in demand for quality food and household supplies from users. In line with this, we have invested in scaling up our grocery operations across the country, strengthening ecosystem partnerships," Flipkart Senior Vice President - Grocery, General Merchandise and Furniture - Manish Kumar said.

He also said the company has witnessed an increased demand for groceries from tier II cities in the past year, fuelled by customers' increasing preference for contactless shopping, from the comforts of their home.

"It is a trend that we think will continue and will set the course of e-grocery space in India," he noted.

Flipkart Grocery has more than 7,000 products available across over 200 categories.

According to Flipkart, its grocery operations will also give a fillip to the local food processing industry, connecting farmers producers to lakhs of consumers through the tech enabled marketplace.

Recently, Flipkart Group CEO Kalyan Krishnamurthy said the company is working on scaling up its loyalty programme, grocery and fashion business as part of its efforts to strengthen its position in the burgeoning Indian e-commerce market.

"... grocery as a category is something where we want to strengthen our value proposition, especially partnering with the roughly million kirana partners we already have in our ecosystem," Krishnamurthy had said during the Walmart post-earnings briefing.