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BENGALURU : Flipkart Wholesale, the digital business-to-business marketplace of e-commerce firm Flipkart, has started selling groceries to kiranas and small retailers on its app, in a bid to increase its market share in the burgeoning e-grocery landscape and high-margin B2B front.

Flipkart Wholesale will operate a fulfilment centre at Bilaspur, Gurugram to deliver directly to kirana shops. Initially, groceries will be available to retailers only in Gurugram. It will be later expanded to other parts of the National Capital Region (NCR) and subsequently to other cities over the next few months.

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The launch of grocery on Flipkart Wholesale comes at a time Amazon India and Reliance JioMart are digitizing kiranas and small enterprises to take advantage of India’s vast consumer base.

Using the app, retailers can order staples, personal care, beverages, cleaning and laundry, snacks and biscuits and packaged food products across over 350 brands.

Last July, Flipkart had acquired the Indian business of Walmart Inc., which operates the Best Price cash-and-carry wholesale stores. In September, the homegrown e-tailer launched its online B2B platform Flipkart Wholesale.

“There are 12-14 million kirana stores in the country which are under-served, and face several pain points in terms of distribution, service. It’s an obvious market to serve better. B2B is a huge opportunity, and digitization of kiranas will boost consumption hugely," Adarsh Menon, senior vice-president and head of Flipkart Wholesale, said in an interview.

The Best Price stores across cities already sell grocery products. Menon said by leveraging the merchandising experience and brand relationships of its Best Price cash-and-carry business, Flipkart Wholesale can transform the ecosystem using technology.

As and when the grocery category is expanded to other regions, the company will set up new fulfilment categories.

Flipkart Wholesale, which connects local manufacturers with retailers, started with clothing and footwear and is present in 23 cities now. Menon said as kiranas became more comfortable with the online medium, there was 75% growth month-on-month in new users and saw a big growth in suppliers, with nearly 250,000 listings.

Online B2B platforms have witnessed rapid growth in recent years but still form a minuscule part of the market. However, the covid-19 crisis saw retailers and brands moving to B2B platforms, where orders could be placed regardless of lockdowns, and they offered demand predictability and assurance of delivery of goods across cities and states.

Online B2B marketplaces Udaan and Jumbotail have both seen a surge in food and grocery categories. Udaan saw food business witness a sharp spike last year, with transaction volume crossing 8000 tonnes per day. It raised $280 million in January valuing it at a little over $3 billion.

Flipkart will invest in fashion and grocery, which are the most under-penetrated from an e-commerce standpoint. For Indian e-commerce penetration to grow and reach $100 billion by 2024, these two categories will play a big role, Kalyan Krishnamurthy, Flipkart Group CEO told Mint last year.

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