Flipkart is reportedly in talks to invest in fresh produce e-grocery start-up Ninjacart. Though there is no official confirmation of the funding talks between the two, media reports claim that the investment could be close to $100 million. The funding by Flipkart is expected to push the value of Ninjacart to around $ 750-800 million from the current $500 million.
If this deal goes through, this would be Flipkart's biggest funding in any start-up. In 2019, Flipkart and Walmart had invested around $30 million in Ninjacart.
Experts point out that e-commerce players have been showing a lot of interest on customer focus and hyper local delivery. “All the e-commerce players, including Flipkart, Reliance and Amazon, have made huge investments in getting consumer traction and loyalty. This segment, which is currently in the urban areas, will witness huge spurt in investments in semi-urban areas and is therefore a sun rise vertical. Flipkart is an established player and addition of Ninjacart to its stable would boost consumer confidence and market penetration. It rounds up the ecosystem and brings it closer to consumers,” observed Subramanyam Sreenivasaiah, CEO at Ascent HR.
According to experts, there are mainly two ways to look at this strategic investment by Flipkart in Ninjacart—the B2B (business to business) ecosystem that Ninjacart is in and getting a decent hold of that segment. “If one looks at the B2B ecosystem which is quite large, there are mainly two players in the fruits and Vvegetable (FnV) segment—BigBasket and Ninjacart. So, such an investment by Flipkart is a way of entry into that space which has always been a tough space to enter. The other reason probably is the support for Flipkart Quick which is in the Quick Commerce space. Here is where the competition is and everyone needs to build strong supply chain delivery capabilities. This is exactly where the vendor ecosystem of Ninjacart can come in handy. So, with this investment, Flipkart is killing two birds with one shot. Probably, I think, this could not have come at a better time for both Ninjacart and Flipkart,” Sathya Pramod, CEO Kayess Square Consulting Private Limited, told THE WEEK.
Some experts say that the strategic investment by Flipkart in Ninjacart is to strengthen the supply chain network for faster and reliable delivery. “The pandemic has shifted the buying behaviors of consumers. Many people have started buying online and the e-commerce players have to win the confidence of customers to retain them and attract new customers. Hence, players like Amazon, Flipkart and new players like Meesho are in a race to expand their customer base. They are working on multiple fronts, and faster and reliable delivery is a key aspect. Reverse logistics is another crucial component in their strategy to win the race. They are also trying to expand their scope of service by leveraging the supply chain and the customer base,” remarked Aditya Narayan Mishra, director and CEO, CIEL HR Services.
Market analysts also feel that such investment will change the e-commerce ecosystem in the country. “Flipkart investment in Ninjacart is symptomatic of the fact that upstream e-commerce players are either investing or making acquisitions of downstream e-commerce players. The emergence of Q-commerce (quick commerce) players is a fertile ground for such possibilities to emanate,” pointed out Alok Shende of Mumbai-based Ascentius Consulting.