Flipkart.com Going Offline

By: Priyanka Yadav

E-commerce marketplace Flipkart, which touched the 100-million registered user mark last month, is considering options including opening brick-and-mortar stores in small cities as part of a so-called online-to-offline (o2o) strategy to attract more shoppers.

With an aim to increase its customer base, the new strategy will target remote parts of the country where awareness about e-commerce is low and users have inconsistent and limited access to the Internet. The proposed offline stores will be set up in the remote parts of the country and will enable Indian users to access Flipkart products, even with a limited access to the internet.

Flipkart’s engineering chief Ravi Garikipati confirmed that the company is working on the assisted commerce initiative, adding that the plan is still at a very early stage. The o2o strategy could take a different shape in the coming months, he added. Speaking about the development, he, mentioned, “Basically we want to have some sort of a connect with the offline world as well—this is one of our upcoming initiatives, but it’s not something that’s out there yet. As we are looking ahead and trying to grow the market and win over the next 3-5 years, there are a few things we need to do.”

Flipkart through this move is trying to promote assisted ecommerce through this initiative, thereby attracting more customers, according to a sources close to the development. In the next 3-5 years, the company does plan to add offline businesses to its portfolio under its expansion plans.

The company recently forged an alliance with e-commerce start-up StoreKing as part of its o2o strategy. Flipkart, however, is not the only e-commerce company betting on o2o. Amazon India has also signed a partnership with StoreKing, which has a presence in more than 10,000 rural outlets across south India.

E-commerce companies in India have largely struggled to expand the market this year, and investors who were betting that India would create the world’s next Alibaba have had to temper expectations amid valuation markdowns and a slowdown in funding.

Online retail sales fell to an annualized $12 billion in June compared with $15 billion in December, according to estimates by research and advisory firm RedSeer Management Consulting.

What it means is that we have folks who essentially spend some time on our website and then when they reach any store, we (want to) have the technology that can tag them as somebody who I know is interested in a particular product and spent so much time on the Web trying to understand what it is. So, it’s online-to-offline there,” said Garikipati