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Walmart-owned Flipkart kicks-off its hyperlocal delivery service

Written by Moulishree Srivastava Published on 

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Hyper-local delivery, a model of picking up goods from neighborhood stores, warehouses, and supermarkets, had gained widespread investor interest a few years ago.

Six months after investing in Indian logistics firm Shadowfax, Walmart-owned Flipkart has set the ball rolling with the launch of its hyperlocal delivery service that promises two-hour delivery time. Local media Economic Times (ET), citing sources, said the homegrown e-tailer has set up a separate business vertical to facilitate the delivery of goods from local stores and its own fulfillment centers, within 90 minutes.

It essentially means that Flipkart is now coming at par with Amazon India, which has a separate service, Amazon Fresh to deliver groceries, vegetables, and other household goods in two hours.

In December 2019, Flipkart had begun building its delivery and supply-chain muscle for its e-grocery business. It invested USD 60 million in Shadowfax and an undisclosed amount in fresh produce supply chain startup Ninjakart along with its parent company, Walmart.

The e-tailer is expected to first start with the hyperlocal, express delivery of groceries, and then gradually expand it to other goods, leveraging the last-mile capabilities of Shadowfax, sources told ET. “The launch is a month away, but the long-term plan is to deliver everything in 90 minutes,” said a person directly aware of the matter.

Flipkart will initially start hyperlocal offering in Bengaluru, and make deliveries from its own local warehouses and select shops to make sure the products are available.

“Flipkart plans to execute deliveries of consumer goods, groceries, medicines, from nearby stores under a separate brand name,” sources told ET, adding that the service will be part of the Flipkart app. The service is likely to be limited to Bengaluru till October.

Startup

Flipkart launched its grocery service Supermart in May 2018, but has been struggling to expand it all along. When the healthcare crisis descended earlier this year, it scrambled to grab the opportunity to deliver groceries, one of the few essential products that were allowed to be sold during the eight-week long lockdown.

In the past two months, to ensure the supply of essential products, Flipkart inked deals with retail store chains like Spencer’s and Vishal Mega Mart, as well as FMCG company Tata Consumer Products Limited. Recently, it partnered with the Karnataka State Mango Board to deliver the popular fruit across the country. The company also partnered with cab-hailing platforms Uber and Meru to bolster its last-mile delivery service in select cities.

The demand for grocery items has seen a steep surge since March after India enforced the lockdown to prevent the virus spread. While India’s nascent e-grocery market was already crowded with Amazon, Bigbasket, and Grofers, as well as, food tech giant Swiggy and online concierge platform Dunzo, Reliance’s ambitious e-commerce venture JioMart’s recent entry has made the segment more competitive.

In the recent months, Amazon India, JioMart, and Swiggy have ramped up their grocery delivery services and expanded them to about 200-300 cities. Flipkart, on its part, is doing the grocery business in five cities. However, the company doesn’t seem to be in much rush.

We will very gradually expand it to more and more cities as and when we have the right value proposition for the customer and a lot of it will also be done through partnerships with the ecosystem,” Kalyan Krishnamurthy, CEO of Flipkart, said in an interview with ET.

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