Flipkart Plans To Add Video Streaming, Says CEO Krishnamurthy
Flipkart plans to offer a video streaming service to attract more loyal users as cheap data has triggered an explosion in the online consumption of soaps to movies.
“Our customer segment today is heavily skewed towards 18-35 age group, and that audience watches a lot of video, both in terms of time spent, frequency, and it is disproportionately high,” Kalyan Krishnamurthy, group chief executive officer at Flipkart, told BloombergQuint in an interview. “Do we want to have a partnership with leading players in the industry to offer some of the services in video? We probably want to do that.” He said it could be in the form of acquisitions or partnerships.
Flipkart, recently acquired by Walmart Inc., already has some ties with Hotstar as it launched a video advertisement platform with Star India’s streaming service. Hotstar is also one of the partners for Flipkart’s customer loyalty program, Flipkart Plus.
The online retailer’s interest in content comes as India’s streaming market, according to a report by Boston Consulting Group, is expected to touch $5 billion by 2023. That’s driven by low 4G costs—a fallout of a bruising tariff war triggered by the telecom arm of India’s richest man Mukesh Ambani. Netflix, Hotsar, AltBalaji and many such services are already available. Flipkart’s biggest rival Amazon bundles in content with its Prime membership, one of the biggest contributors to its sales.
Krishnamurthy, however, said Flipkart won’t build a video content platform on its own from scratch. “We are not a content company as a DNA.”
Flipkart has had an eventful 2018. Walmart brought more than 77 percent stake of the company for about $16 billion. Sachin Bansal exited the company at the time. His fellow co-Founder Binny Bansal (not related) left last month following an investigation into alleged sexual assault though he denied it and Walmart didn’t find evidence to corroborate allegations.
Krishnamurthy, who has been running day-to-day operations at Flipkart for about two years, said that won’t impact the online retailer. Flipkart’s business is not dependent on one person, he said, adding that Binny is still involved in the company as a board member. “He is there for advice and any kind of mentorship our leaders want.”
Flipkart’s Grocery Push
Flipkart, which launched its grocery unit Flipkart Supermarket after a pilot of more than six months, hasn’t expanded beyond four cities.
Krishnamurthy said the retailer understands the opportunity is massive. So far, it has been learning experience for the company, he said. “We are operating in four cities and are looking to add one more.”
It’s up against the likes of Amazon India, Alibaba-backed BigBasket and SoftBank-backed Grofers. Even brick-and-mortar player D-Mart, operated by Avenue Supermarts Ltd., is running a pilot to deliver products ordered online and Ambani’s Reliance Retail Ltd. is also betting on a network of kirana stores to go online.
That doesn’t bother Krishnamurthy. “If you crack the model, it doesn’t matter who competitors are or what they are doing.”