E-commerce has tapped into only 6% of the overall retail
With a 46.8% Year-on-Year increase in order volume, the electrical items and peripherals segment of Indian e-commerce has experienced strong growth. One of the main drivers of growth has been the post-pandemic push, which is leading retailers to abandon owning physical stores and adopt e-commerce on a local and international scale.
In an exclusive interview with India Business and Trade, Rajneesh Kumar, Chief Corporate Affairs Officer, Flipkart Group, says that e-commerce platforms collaborating with small businesses will change buyer and consumer behaviour. Kumar also says that more needs to be done to bring digitization on the ground level as Indian e-commerce industry has tapped into only 6% of the offline retail businesses.
Photo Source: Flipkart
IBT: We are living in a post-pandemic era. How has e-commerce industry transformed in the last 3 years in terms of adding more sellers and buyers?
Rajneesh Kumar: As Covid-19 came in, we initiated a dialogue with our sellers and realised that certain things could not be sold. So, we thought of creating an alternative for small entrepreneurs to run their businesses. For example, those who manufacture clothes, we advised them to make face masks – essentials which were needed at the height of the pandemic. Our team on the ground worked with sellers to rethink the product portfolio that they should have in the market.
We partnered with the government at a time when consumers were stuck at home and unable to access essential products, which you use in daily life. So, through collaboration, we made sure that sellers are brought on-board and partnered up with Kirana shops. We also allied with distributors, so that products are available to the consumers via supply chain.
I’ll give you another example, in groceries. Before COVID=19, we were present across 8-9 cities in India. Gradually we on-boarded mango sellers to sell products online. We realised the necessity to partner with the government to safeguard our sellers and distributors. They are just like us, as they too need to protect their families and run businesses to earn. So, a lot of collaboration happened. We do not just assist the small businesses but drive up the demand and make sure that consumers have access to all of these products through e-commerce.
We launched our app in many languages so that consumers sitting at home have an opportunity to access e-commerce. For example, today every single major language spoken in India like Bengali, Hindi, Marathi, or Gujarati, can be used as a mode of interaction on our Flipkart app. This has brought in new consumers.
It is satisfying to see sellers getting more orders and also witness a behavior change in consumers. So, COVID-19 issue was instrumental in creating or rather strengthening the e-commerce eco-system that we have been working to create.
IBT: The tech-savvy younger generation are reaping benefits of digitization in e-commerce. In your view, how is the older generation utilising digitization to access e-commerce platforms?
Rajneesh Kumar: One of the important features was eliminating the language barrier. The younger generation might know specific terminology to search for a product online. But with the older generation, we believe in setting a user-friendly language ecosystem so that it is easier for them to navigate on the app.
Nowadays, through voice commands also, you can buy commodities. So, in a way this has enabled people above the age of 50 years to place orders online. To give you a perspective, we are the biggest e-commerce platform to sell saris online by stretch (demography). Gujarat area is the predominant seller base and these saaris are not just bought by the younger age group but across the age size. A lot of onus is on us on how to use technologies like AI, Machine Learning to make sure that you are able to bring features out to those age-groups. It is very early for e-commerce in India, as we have tapped into only 6% of the overall retail.
IBT: How do you see Artificial Intelligence transforming e-commerce platforms in India? How is an e-commerce giant such as Flipkart integrating AI in its operations?
Rajneesh Kumar: So, when you go to Flipkart app and specifically to the Help option under queries section, there is a built-in AI that will talk to you and give responses as per your questions. For us, AI is not new, we have been working on it for several years. We are a tech company and have almost 3,000 engineers working for us. Their job is to ensure that they keep doing innovations. Every aspect of AI and Machine Learning is important for any e-commerce industry to survive.
IBT: In the 4th edition of SAMARTH initiative, Flipkart has announced partnership with the Gujarat state government. Is the company planning on more collaborations with the other states?
Rajneesh Kumar: Today, we have partnership with every state government. State governments have become very progressive in India. In the Centre also, we have partnered with Urban Livelihood Mission and Rural Livelihood Mission. All the Self Help Groups (SHGs), which are associated with these missions, have become a part of our marketplace.
Through One District One Product (ODOP) also, we are partnering with government institutions and local businesses. It is rather thrilling to go to each region and see the artisanal offerings that they have. Our initiative is testimony to the engagement we have done on-ground with local sellers and artisans.
IBT: How has e-commerce benefitted from the One District One Product (ODOP) initiative of the government?
Rajneesh Kumar: We (Flipkart) can only grow if more sellers come in and the e-commerce industry can grow if there are more consumers. The products promoted under ODOP are amazing products, which are done by our artisans across the country. It is a part of our national heritage. So, as we bring these products into the online market place, more consumers get to see them and buy.
We have a new landing page of SAMARTH, which has products from every part of the country on our site and you can look at them. So, ODOP has been transformational as it is providing more visibility to regional products on a national level.
IBT: On the sustainability aspect, I would like to know your views on the latest trends and how has Flipkart adopted the idea of sustainability?
Rajneesh Kumar: In our supply chain, we have eliminated single plastic packaging completely. Including packaging of fragile items. We used mashed paper which works as an insulator, thereby we no longer use plastic bubble wraps.
There are many initiatives I can list out; single use plastic has been eliminated from our supply chain and for last mile delivery, we have made great progress on including electric vehicles. We have almost 3,600 vehicles right now. From the operational perspective, some of the biggest fulfillment centres we have right now are platinum grade facilities i.e., they are water positive, using renewable energy. We are part of RE100 and EV100 which is about global consortiums. We are among the leading e-commerce players not only in India, but globally when it comes to incorporating sustainable actions in our business operations. We are committed to net zero goals; in scope 1 scope 2 by 2030 and scope 3 by 2040.
We are not just attempting in saying it, but we are actually delivering on our sustainability commitments.
Rajneesh Kumar is Chief Corporate Affairs Officer, Flipkart Group (Walmart Group company). He leads Corporate Affairs for Flipkart’s operations and oversees and directs strategic Government engagement, Public Policy, Communications (internal & external), CSR/philanthropy, Sustainability initiatives in addition to helping drive long-term strategy. With a career spanning over two decades in the government and private sector, Rajneesh is a noted thought leader in the industry on public policy, public relations and creation of shared value. Prior to Flipkart, Rajneesh was Chief Corporate Affairs Officer of Walmart India, the Cash & Carry arm of Walmart in India, where he was responsible for managing the overall reputation of the company through Government engagement, Public Affairs, strategic communications, CSR and Sustainability.