It now seems like e-tailer Flipkart – owned by Walmart would pose competition to the multitude of kirana stores in India, through dedicated physical retail stores concentrating on food supply more than anything else. This speculated offline model could see Flipkart enter the leagues of Amazon that already has its brick-and-mortar stores albeit overseas and not exactly in India.
As per The Times of India, Flipkart grocery outlets would apparently leverage the 100% Foreign Direct Investment (FDI) permitted in the food business in India; at this juncture, it is worth noting that 100% FDI is allowed only in single-brand retail with a chunk of the products requiring an Indian connection.
As far as the reported Flipkart physical retail stores are concerned, it remains to be seen as to what the models for customers would be; will there be cash acceptance or will these stores go completely cashless like a few of Amazon’s retail outlets in western economies; with initiatives like Digital India and emphasis on cashless transactions, it seemingly makes sense to have cashless stores but catering to who would be the question in case these come to fruition?
Also, with the kirana shops even selling food items and grocery in India and with single-brand stores like Big Bazaar, D-Mart and Reliance Fresh already in the business and recognized as prominent players, it remains to be seen how Flipkart (Walmart-driven) stores find relevance; they could muster these considering Flipkart’s massive online success
An unnamed source told Times of India that the strategy, behind setting up food outlets by Flipkart, was due to a major chunk (60%) of sales being generated through food for Walmart.
As of now, Walmart has physical stores in India operating on a cash & carry model. Hence, it makes sense for the speculated Flipkart grocery & food offline centres to adapt the same strategy. What do you think?