{"id":6035,"date":"2023-03-13T17:55:00","date_gmt":"2023-03-13T17:55:00","guid":{"rendered":"https:\/\/www.thirdeyesight.in\/?p=6035"},"modified":"2023-03-17T08:22:05","modified_gmt":"2023-03-17T08:22:05","slug":"flipkart-features-local-regional-brands","status":"publish","type":"post","link":"https:\/\/myechoproject.com\/TES\/flipkart-features-local-regional-brands\/","title":{"rendered":"Flipkart is Looking Beyond National Brands to Drive Growth"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Tushar Goenka, Financial Express <br>March 13, 2023<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Flipkart Supermart, the online grocery delivery platform of the Walmart-owned ecommerce company, is betting on regional brands to unlock the next phase of growth. Over the past few months, the e-tailer has been listing brands and making them more readily available in cities where their recall value is high.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The regional push targets staples and is pronounced across categories such as atta, tea, pulses, among others. So, instead of offering, say, just the Tata brand of tea, Flipkart also showcases local favourites like Nameri Tea for the residents of Assam. Similarly, instead of selling Nestle\u2019s Maggi and ITC\u2019s Yippie noodles across the country, Flipkart will also let customers pick brands selling Korean noodles, popular among north east teenagers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The shift in focus is vital in a country whose grocery bill totals $600 billion, of which offline sales account for a staggering $592 billion, while online is a much smaller $8 billion. Further, of the total grocery bill, the share of regional brands at around 60% is much higher than organised national brands that stood at 40%, according to rough estimates from EY.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So far, the plan seems to have worked for the company. Smrithi Ravichandran, head of grocery, says her unit has grown 2.5X between June 2022 and February 2023.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The reason for this shift in focus is easy to understand. In Ravichandran\u2019s own words, \u201cThe Indian palette changes every 150 kilometres.\u201d Consider this. The kind of toor daal consumed in Chennai is different from that consumed in Madurai. That is, even within a single state (Tamil Nadu in this case) there is a huge difference in preferences. And that is true for most categories.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Next, look at the potential. Ravichandran\u2019s department sees about 65-70% of its orders coming from Tier 2 and beyond, with metros and Tier 1 cities accounting for the rest.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Analysts believe Flipkart\u2019s initiative is a step in the right direction. <strong>Says Devangshu Dutta, CEO, Third Eyesight, a retail consulting firm, \u201cFocusing on regional brands makes eminent sense not just to cater to tastes in a particular geography but to also serve consumers who have moved away from their hometowns and might find it difficult to buy their chosen brands.\u201d<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That said, catering to regional preferences is easier said than done. \u201cIf one has the same selection even for the same state, it doesn\u2019t help. But there is a cost in catering to that varied choice and we\u2019ll need to operate more fulfilment centres,\u201d Ravichandran adds.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>From what to how<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Flipkart\u2019s plans to double down on the regional selection in grocery will mean partnering with some of them. Here consumer data available with Flipkart will come in handy, says Ravichandran.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Angshuman Bhattacharya, national leader, consumer product and retail, EY India, believes that by offering more regional brands in categories like atta, Flipkart will deepen penetration, giving smaller players a chance to tap a wider customer base. \u201cSmaller, regional brands will be hungrier for growth and may end up offering healthier margins than what a nationalised player would do,\u201d he adds.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this, Flipkart\u2019s approach is similar to that of Future Retail under Kishore Biyani, who underscored the importance of a regional brand-led strategy. \u201cThe Future Group had launched around 10 private labels of atta and that is no easy feat. A regional brand-led focus might prompt Flipkart to toy with the idea of launching its private labels at a later stage. Or it may even end up asking the regional brands to package staples under its brand, thereby yielding much higher margins,\u201d Bhattacharya of EY points out.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Flipkart isn\u2019t drawing the line just yet. The company will invest in technology to tell customers about the origin of the products they order. \u201cConscious consumerism is another aspect we will focus on. So, on the packet of a toor daal, consumers will have traceability regarding where and when exactly the daal was harvested,\u201d Ravichandran adds.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This journey will not be a cakewalk for Flipkart. Analysts point out that to be able to partner with Flipkart and address its customer base of over 450 million, smaller brands must up their supply chain spends. That apart, there is always the fear that if the e-commerce giant does not get the desired results, it might discontinue such tie-ups, leaving the regional players in the lurch. Flipkart must allay these fears right at the outset.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>(Published in <a href=\"https:\/\/www.financialexpress.com\/brandwagon\/local-brands-hold-the-key\/3007478\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Financial Express<\/a>)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>E-tailer Flipkart has been listing local\/regional food &#038; FMCG brands and making them more readily available in cities where their recall value is high.<\/p>\n","protected":false},"author":1,"featured_media":6036,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[27,212,249,215,62,131,43,46,47],"tags":[52,177,102,103,106,250,214,216,59,191,69,84,86,166,65,542],"class_list":["post-6035","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-branding","category-consumer","category-e-commerce","category-food-grocery","category-market-research","category-product-development-and-design","category-retail","category-strategy","category-supply-chain","tag-branding","tag-consumer-behaviour","tag-consumer-markets","tag-consumer-products","tag-consumer-segments","tag-fmcg","tag-food","tag-food-grocery","tag-india","tag-indian-market","tag-indian-retail-sector","tag-merchandise-planning","tag-merchandising","tag-modern-retail","tag-retail","tag-segmentation"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - 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