Flipkart’s Digital Mall Now Has A Food Court

When Flipkart entered quick commerce last year, many were sceptical of the move, as the ecommerce giant was seen as a day late and a dollar short. The market was already dominated by Blinkit, Zepto and Swiggy Instamart, so Flipkart Minutes was not given much of a chance. 

Now, a year later, Flipkart is preparing to enter the uncharted waters of India’s food delivery market to take on Zomato, Swiggy and Rapido’s Ownly. 

People with knowledge of the matter told Inc42 that Flipkart is expected to roll out food delivery within the next few weeks. The startup will begin with a pilot in Bengaluru before deciding on a wider expansion strategy.

After years of being dominated by Zomato and Swiggy, Rapido refreshed the food delivery segment with Ownly, and now Flipkart is also throwing its hat in the ring. 

For Flipkart, however, breaking through into the market will require more than launching yet another service. While winning over restaurant partners will be one of the biggest challenges, convincing millions of consumers to regularly order their meals on Flipkart will prove an equally tougher nut to crack.

More Than Food Delivery

Unlike several recent entrants, Flipkart is not expected to prepare or sell food under its own brands. People aware of the company’s plans told Inc42 that Flipkart will be onboarding restaurant partners and is unlikely to build a network of cloud kitchens similar to Zepto Cafe, Blinkit-owned Bistro or Swish. Instead, the food delivery service is expected to connect customers with existing restaurants, following the marketplace model adopted by Zomato and Swiggy. 

The decision keeps Flipkart away from the operational challenges of running kitchens while allowing it to offer customers a wider selection of restaurants from the outset. Flipkart will also tap the ONDC network to onboard restaurant partners. 

The bigger opportunity, however, lies elsewhere. For Flipkart, food delivery offers a way to make its app a part of consumers’ everyday lives, something traditional ecommerce lacks. In some ways, the company is seeing whether the daily habits of the most loyal Flipkart Minutes users can be extended to food delivery.  

The user base is Flipkart’s edge that new entrants like Rapido do not have. The company already has 500 Mn registered users on its platform. Instead of spending heavily to build awareness from scratch, it can introduce food delivery to an audience that already opens the app everyday for quick commerce and every major shopping season. 

Taking On Swiggy, Zomato

Flipkart is entering the market at a time when restaurants are actively looking for more competition to come in to disrupt the stranglehold of Zomato and Swiggy. Rapido’s early success is built on this notion. 

Rapido’s Ownly promised restaurants a lower-cost alternative to the existing duopoly. However, Ownly remains restricted to Bengaluru and is still in its early days. 

Restaurant owners have repeatedly raised concerns over commission rates, delivery charges, mandatory advertising spends and promotional campaigns, arguing that the restaurants are left with razor-thin margins. 

As Swiggy and Zomato charge a commission of 18-28% from restaurant partners, there is discontent among restaurant owners, which has created an opening for new entrants. 

So far, little is known about how Flipkart plans to price the service. Details around commission rates or incentives remain under wraps. However, earlier this month, Flipkart extended its zero commission policy to all fashion products. This is expected to benefit roughly 90,000 active sellers by letting them keep full margins. 

Flipkart certainly has the financial muscle to invest in the business. Backed by Walmart, Flipkart has spent years competing with Amazon. But food delivery is a very different ball game. 

Flipkart’s Digital Mall

Flipkart has spent the past few years widening its presence across categories that consumers use at different points during the day. It entered quick commerce through Flipkart Minutes, giving customers access to groceries and daily essentials within minutes. 

Through Myntra, it has built one of India’s largest online fashion businesses. Cleartrip gives it a foothold in travel booking, while its core marketplace business drives sales across electronics, appliances and general merchandise. 

Besides, the 19-year-old company is also mulling its foray into the ticketing business, where it will directly lock horns with BookMyShow and Eternal’s District. 

At this point, food delivery only plugs another gap, as the ecommerce giant crawls to claw customers across a growing range of everyday needs without asking them to leave its broader network of apps and services. 

A user with a smartphone purchased on Flipkart is buying groceries through Minutes, and wants to book a flight on Cleartrip, shop for fashion on Myntra, buy home decor and appliances on Flipkart and will soon be able to order food and even book live entertainment tickets. And that’s the digital commerce empire that Flipkart wants to build.

Edited By Shishir Parasher
Creatives: Abhyam Gusai

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