BENGALURU: Flipkart is betting that the next phase of Indian e-commerce growth will depend less on discounts and delivery speeds and more on getting millions of smaller-town consumers comfortable buying online.
That shift is reshaping Shopsy, the Walmart-owned company’s hyper-value platform, into a feed-led app built around games, rewards and artificial intelligence (AI)-powered recommendations aimed at keeping users engaged even when they are not shopping.
The redesign reflects what Flipkart executives internally describe as a “penetration problem” in Indian e-commerce: much of Bharat is still not digitally native enough to habitually shop online.
“Pushing users to shop cannot be the strategy,” Sakait Chaudhary, senior vice-president at Flipkart Marketplace and Shopsy, said in an interview with Mint. “First lesson, let them understand the power of getting connected to a technological world. Once they are comfortable with it, let them make their own choice about commerce.”
The revamp comes as competition intensifies across India’s hyper-value commerce market. Listed rival Meesho continues to dominate the segment, Amazon India is scaling Bazaar, and offline retailers such as Trent’s Zudio are rapidly expanding affordable fashion retail in smaller cities.
India’s value and hyper-value retail sector is estimated at $680–720 billion and is among the fastest-growing consumer segments in the country, as households shift from unorganized local markets to organized, value-first formats. The market is projected to reach $1.09–1.15 trillion by 2028, with most demand coming from tier-2 cities and beyond.
Entertainment first
“The number of people who are coming in, playing games, and exiting is an eye-opener to us,” Chaudhary said. “They’re just adding that credit in the bank through SuperCoins (Flipkart Group’s rewards programme) but not shopping just yet.”
For most e-commerce companies, rising engagement without purchases would be a warning sign. Shopsy, however, appears to see it as evidence that users are becoming more comfortable navigating digital experiences.
For Flipkart, the redesign is effectively a bet that higher engagement will eventually translate into commerce.
Flipkart executives argue that traditional e-commerce models assume users arrive with clear purchase intent—searching, comparing and buying products. But many consumers in tier-3 and tier-4 markets are still more accustomed to using the internet for entertainment than transactions.
Shopsy’s redesign attempts to bridge that gap by turning shopping into a feed-led, entertainment-style experience that relies less on search-led behaviour and more on browsing and discovery.
“We are not relying on search and conversations,” Balaji Thiagarajan, Flipkart’s chief product and technology officer, told Mint during the interview. “We are actually relying on feed-based experiences. We notice that they’re typing less and exploring and watching stuff more.”
The approach increasingly mirrors social media and short-video platforms, where discovery is driven by recommendation engines and endless feeds rather than intent-led search.
In Shopsy’s case, AI powers much of that discovery layer. The app adapts recommendations in real time based on clicks, viewing patterns and engagement behaviour. Users browsing ethnic wear in one region, for instance, may see entirely different feeds from users exploring footwear elsewhere.
The company is also extending AI tools to sellers. Merchants can generate richer catalogue visuals using AI prompts, such as showing apparel on models or shoes in real-world settings, without investing in expensive shoots or production infrastructure.
Shopsy operates a no-commission model for sellers across 1,300 categories, including fashion, beauty, electronics and general merchandize.
The monetization problem
Yet the strategy also carries clear risks.
“As consumers become more digitally involved, value retailers have a growing opportunity to use technology to deepen loyalty and drive engagement, but the pace of adding new online shoppers is beginning to slow. Gamification can have limitations and the success of new user addition through such features is yet to see proof,” said Madhur Singhal, managing partner (consumer and retail), Praxis Global Alliance.
Flipkart executives, however, say immediate conversions are not the priority.
“I’m not bothered about conversion at the moment. Right now, I’m just working on making users comfortable with digitization,” Chaudhary added.
That suggests Flipkart is positioning Shopsy less as a conventional shopping app and more as a long-term onboarding layer for India’s next wave of internet users.
“The journey in India is just getting started,” Thiagarajan said. “Hyper-value is enabling consumers who are not digital natives in shopping to become digital natives in shopping.”