Dive Brief:
- Flipkart, a Walmart-owned and India-based digital retailer, has expanded its last-mile delivery services to 27,000 kiranas, or privately-owned local convenience stores. The stores are located across 700 cities and 20 states throughout India.
- The move is in preparation for India's festival season and Flipkart's Big Billion Day sales event.
- Media reports indicate Flipkart plans to enhance its capability to deliver to doorsteps and storefronts across India through its significant investments in artificial intelligence-enhanced order allocation software (to overcome the fact that many residences in the country don't have formal addresses) and robotic order fulfillment in its regional warehouses.
Dive Insight:
By leveraging a brick-and-mortar presence, Flipkart looks to hold its own against mounting e-commerce competition in the country. Amazon and Reliance, a leading Indian retail conglomerate, have also been eyeing kiranas as potential delivery and pick-up nodes for grocery and consumer goods orders, especially as the stores have begun to modernize, particularly by accepting mobile payments.
Walmart acquired a 77% stake in Flipkart in 2018, stating in a press release it "expects [Indian] eCommerce to grow at four times the rate of overall retail" hence its investment in one of the country's foremost e-commerce giants. Walmart cited Flipkart's "integrated ecosystem, which is defined by localized service, deep insights into Indian customers and a best-in-class supply chain," as motivations behind the partnership.
In India, on-time and secure delivery can be a challenge because some addresses are not formalized, or multiple family members may use a single home address. Buy online, pick up in-store (BOPIS) may solve some of those challenges. By turning community centers like kiranas into mini distribution hubs, customers in urban and rural areas alike can pick up packages faster and more reliably while bringing in additional business for shop owners.
Amazon is taking a similar approach by setting up package lockers in major train stations in Mumbai. Customers can place an order online and pick up their order along their daily commute instead of making sure they are home when it gets delivered. It has also been steadily increasing its tech, logistics and fulfillment presence in the country overall in recent years, seeing a growth opportunity in India's expanding e-commerce sector.
