Flipkart which has about 30,000 small and medium business sellers on its platform has announced that it would be looking to diversify its range of business offerings in the coming months. Te sixt most visited website in India according to Alexa is also aiming to grow the number of small and medium business sellers to 1 lakh in the next 12 months. The online majors new move is seen as an effort to explore new high margin revenue streams to accelerate profitability.
Flipkart would be looking to diversify into these fee based businesses ahead of its potential public listing. Sources say that diversification is a part of a larger strategy of going for an IPO and before that the company is exploring all possible avenues of reducing losses and to turn profitable. As part of diversification into publishing online ads and brand consulting the Founder and Group CEO, Sachin Bansal would be shifting out of daily operations and would be focusing on strategic initiatives.
Flipkart has also decided furniture as a category on the commerce front and the online retailer is looking to expand in that area as it would be giving them higher margins. Speaking about the new move to offer online advertising where by it would be getting into the space of Google or Facebook, Mekin Maheshwari, chief people officer at Flipkart was quoted as saying, “We know something about the most important decision that a consumer makes, that is purchase. What you like on Facebook versus what you spend your own money on, the value of that data is a lot higher.”
The Indian ecommerce market is projected to reach $43 billion in value by 2019, according to Nomura has been recently seeing a lot of traction and biggies like Snapdeal, Flipkart and Amazon India has also been trying to leverage technology to draw higher margins and get over the cash draining discount battle. Recently the companies agreed on adapting international standards on discount in online retailing which stands at 20 per cent.
