Flipkart identifies tier-2 and tier-3 markets as key areas for growth; reduces shipment cost to drive high-profit margins  | The Financial Express

Flipkart identifies tier-2 and tier-3 markets as key areas for growth; reduces shipment cost to drive high-profit margins 

According to the company, 60% of total customers are from tier-3 cities, and 1 in every 3 shoppers is less than 25 years of age. 

Flipkart identifies tier-2 and tier-3 markets as key areas for growth; reduces shipment cost to drive high-profit margins 
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Walmart Inc-backed e-commerce company Flipkart aims to increase its consumer base in tier-2 and tier-3 cities especially in the fast-moving consumer goods (FMCG), home and general merchandise categories, Kanchan Mishra, business head, FMCG, home and general merchandise, Flipkart, told Brandwagon Online. According to the e-tailer, this was also reflected in its marketing strategy for FY23 wherein the company had undertaken various influencer campaigns which had targeted consumers in tier-2 and tier-3 cities. 

In September, Flipkart claims to have roped in over 45 regional influencers for its #FlipkarShoppingMela campaign which was rolled out in languages such as Oriya, Bengali, Manipuri and Assamese. “This was a way for us to showcase our range of products and acquire consumers from these areas,” Mishra stated. 

In an attempt to attract more consumers to the platform, the company aired various livestreams during the festive period, which resulted in the e-tailing site reporting nearly 4.5 million visits. Of this, 65% were from tier-2 cities. Additionally, for Diwali, Flipkart launched its metaverse shopping experience called Flipverse. As per Mishra, the virtual try-on feature under the beauty and makeup category was used by one in five customers and saw a rise in conversion rate by four times. “Around 60% of customers were from tier-3 cities, and one in every three shoppers was less than 25 years of age. When compared to mobile and electronics in India, the FMCG, home, and general merchandise categories account for one-third of the total ecom presence,” she added. 

Interestingly, Flipkart claims to have been able to lower its supply chain cost and earn profit out of items with a lower average selling price. “After major work in our supply chain management, we have reduced our shipping costs, where it is cheaper than China now,” she highlighted. According to the company, in the last few years, there has been a shift in consumer behaviour patterns as consumers are likely to buy larger quantity bottles and regimes as opposed to the sachet culture which had permeated 20 years ago. “Therefore, the overall e-commerce sector is expected to go through a change and new customers will be onboarded from tier-2 and tier-3 cities. This also includes a high propensity of repeat purchase,” she said.

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First published on: 06-12-2022 at 09:02 IST