Flipkart Aims To Capture 2% of Two-Wheeler Market In India; Can They Sell 3,00,000 Units In A Year?
In a major decision which can change equations for the automobile industry in India, Flipkart has decided to go full throttle on selling 2-wheelers via their online commerce portal.
If reports are to be believed, then Flipkart aims to capture 2% of this market by December end, which means that around 3 lakh units of 2-wheelers can be sold only on Flipkart.
Last year, 1.5 crore units of two-wheelers were sold in India, which was an increase of 1.2% compared to 2014.
As per statements issued by Flipkart, it seems that they will target both 4 wheeler and 2 wheeler; and the process will begin with bikes and scooters.
Adarsh Menon, vice-president, electronics and automobiles, at Flipkart said, “We have piloted both four-wheelers and two-wheelers. We have been there with four wheelers and going live with two-wheelers. The size of the market is large for both. But, to begin with, two-wheelers is the logical first step because the customer base for that segment is much more. Ultimately, we will sell four-wheelers and we will sell them this year itself.”
Last year in December, Flipkart officially started selling bikes and cars online, via a pilot project. In November 2015, Snapdeal had launched their exclusive ‘Snapdeal Motors’ for targeting this niche, highly profitable industry.
Automobiles Are Selling Online!
After groceries and food delivery, the sale of automobiles have been a huge hit in India.
For instance, Flipkart started selling car-accessories last April, and till date, they have witnessed an increase of 600% in sales. Such is the anticipation, that Flipkart and Mahindra decided to open online booking of their new KUV100 on Flipkart.
The trend already started way back in 2013, when Snapdeal decided to sell Hero’s new electric bike online.
Interestingly, in 2014, we had reported how 2-wheelers attracted maximum attention of ecommerce buyers during Diwali, and sale of bikes and scooters witnessed all time high records.
Kawasaki and TVS have already tied-up with Flipkart to sell their 2 wheelers via online platform.
Is This A GMV Centric Strategy?
The current ecommerce war is all about increasing the GMV or Gross Merchandise Value of portals which increases their valuation, and their funding prospect.
As per observation by LiveMint, Flipkart has decided to increase their GMV by going after the 2-wheeler market, after focusing heavily on furniture, electronics and home care products, which are typically large priced products.
In case it’s a GMV centric move, then it can raise some alarm bells for offline retailers, who invest considerable amount of money in maintaining and optimizing their showrooms with expensive employees and infrastructure. But the question also remains: Who will provide after-sale service of these online bought vehicles? Will Flipkart delve into automobile servicing as well?
We will keep you updated as more details come in.
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