Flipkart’s Shopsy Starts Offering Groceries in 700 Cities, Aims to Become Largest Retailer in India

Flipkart's social commerce app Shopsy on Tuesday added grocery as a category on its platform. By leveraging the supply chain infrastructure and technology capabilities of the e-commerce company, Grocery on Shopsy is claimed to cater to consumers across 700 cities, spanning over 5,800 pincodes. The new category is also touted to have over 6,000 products across 230 categories — running from staples and fast-moving consumer goods (FMCG) to various other dry groceries. Flipkart is set to attract users on the platform by offering a flat five percent commission margin.

Shopsy is claimed to ensure stringent quality control alongside enabling social commerce for grocery shopping by using Flipkart's fulfilment centres and supply chain. The Walmart-owned company has its fulfilment centres located in various parts of India, including Ahmedabad, Bengaluru, Chennai, Coimbatore, Delhi, Hyderabad, Kolkata, Lucknow, Mumbai, Patna, and Pune.

With the new move, Shopsy users will now be able to shop for value groceries by adding and checking out products in their carts. Users can also combine orders for multiple individuals in their network and share grocery items over social media through the app. This enables them to earn a flat five percent commission margin that Flipkart promises to be delivered directly to their linked bank account. Further, customers are claimed to receive up to 50 percent savings.

“Grocery is a key consumer need and we are committed to making e-grocery affordable for consumers and sellers alike,” said Prakash Sikaria, Senior Vice President - Growth, Flipkart, in a statement. “We have been working on reducing the cost of delivering groceries over the last few months. We are happy to announce that we have achieved best in class cost structure which makes us confident of scaling grocery on Shopsy.”

Flipkart claims that by bringing the new category it is aiming to make Shopsy as the largest grocery retailer in the country. The company seems to be in plans to take on the likes of Google-backed Meesho, Reliance Industries' JioMart, and Tata-invested BigBasket.

Shopsy was launched by Flipkart as its social commerce platform in July this year. At the time of its launch, the company didn't consider grocery as a category, though it has now been chosen as one — considering the growing market of online grocery delivery in the country.

In late November, Flipkart announced that Shopsy clocked in four times revenue growth during the festive period and grew its user base 3.7 times over what it had earlier. The app, which is currently limited to Android devices, also managed to cross the 10 million downloads on Google Play. All that growth mainly came from categories including fashion, beauty, general merchandise and home (BGMH), Flipkart had said.

Flipkart claims to offer a zero-commission marketplace model through Shopsy where local and small businesses as well as individual entrepreneurs can sell products in their locality and among contacts. The model is similar to how Meesho allows small sellers to sell a variety of small-ticket items using social media platforms. It is also unlike Flipkart's original e-commerce platform where customers buy products from various large-scale retailers.

According to a report by consulting firm RedSeer, social commerce in India has the potential to touch up to $7 billion (roughly Rs. 53,100 crore) in gross merchandise value (GMV) by 2022. The growth of social commerce is also speculated to create new opportunities for resellers and suppliers in the country in the next five years.