Flipkart becomes penny-wise; funds would be used for investments, acquisitions & furniture category

Flipkart is rolling in billions, that’s known to all. But the etailer is being careful about spending every penny. The larger goal is to utilize the funds to take-down Amazon. But the company’s sub-goals are to acquire new companies, make new investments and build its furniture category with the help of the billions.

Flipkart increases the budget for financing investments

As per regulatory filings with the Ministry of Corporate Affairs, the online marketplace has upped its financing investments reserves to $1.25 billion (Rs 8,000 crore). This hints at the fact that Flipkart would use a considerable chunk of its funds to invest and acquire.

The filings dated 29th August revealed that Flipkart increased the reserves from Rs. 3,000 crore to Rs. 8,000 crore because the previous limit wasn’t enough to meet the etailer’s expansion plans.

“Considering the future requirements of the company… the present limit of Rs 3,000 crore is deemed insufficient,” mentioned the filings.

The marketplace’s other business units such as fashion arms Myntra & Jabong and e-wallet PhonePe too would be beneficiaries of Flipkart’s billions.

“Apart from acquisitions, Flipkart is likely to use the sum for funding needs of group entities like Myntra, Jabong, PhonePe and Jeeves Consumer Services,” elucidated Anup Jain of Redback Advisory Services.

The Bansals re-launch furniture category

The home-grown etailer had expressed its interest in the furniture category back in 2014 and officially entered into it in 2015. The marketplace placed its bets on furniture in 2016 but couldn’t make great inroads in this product category.

Ahead of the Big Billion Days, the biggie has re-introduced this vertical. In the last two years, Flipkart worked on the biggest pain-points of this category and looked for solutions before re-launching it.

Nandita Sinha, Head – furniture category at Flipkart asserted,

“Our pilot was to learn about the industry and customer pain points. We figured out that the customer experience in the industry was very poor; there are no large-scale logistics players focused on furniture, reliable and quick installation is very important for customers and, most importantly, there is a dearth of good quality furniture at affordable prices. We picked each of these challenges and solved them.”

Highlights of Flipkart’s furniture segment:

• On-boarded brands such as Lazy-Boy, Home Town and Peps

• Roped in high-quality furniture suppliers from  Indian cities – Jaipur, Jodhpur, Nagpur and international suppliers from China and Malaysia

• 20-step quality check, 10-day returns and up to 5 year warranty (on selected products)

• Created a special ‘tech-enabled furniture’ logistics within Ekart, Flipkart’s logistics arm

• Installation service in 84 cities, with the help of Jeeves, its service partner

• Set up two furniture-only warehouses; one in Bengaluru and the other one in Mumbai

“We worked with Jeeves so that raising queries, scheduling time slots for installation, requesting for exchange etc become a seamless online experience for customers… We are getting a lot of orders from cities like Coimbatore, Vishakapatnam and Ernakulam and not just from the metros. We consider this a big win,” stated  Sinha.