India’s homegrown e-commerce platform, Flipkart, is ramping up its beauty and personal care segment. The company has 60 per cent of new customers from Tier 2 and Tier 3 cities, contributing to a 1.5X jump every year, and is introducing AI-enabled new technology to further increase penetration. Kanchan Mishra, Senior Director, Consumables (FMCG), Home and General Merchandise, Flipkart, spoke to the business line on the sidelines of the Glam Up Fest held in Mumbai. Edited excerpts follow.
What kind of growth in the personal care and beauty segment is Flipkart targeting?
The e-commerce penetration of the beauty and personal care and FMCG category in India stands at 10 per cent, whereas in the US and China is at 50 and 60 per cent. A lot of our first-time application users come through beauty and personal care and FMCG categories because it is very less penetrated. They drive retention on the platform and are not single-use categories. We see these categories grow in the e-commerce journey that India will travel. Larger e-commerce is expected to grow at 25 per cent CAGR over the next five years, and beauty and personal care will grow higher because of the under-indexed e-commerce penetration that we have.
Flipkart is aiming to add 200 million digital shoppers to its platform. How is it being achieved?
We have 500 brands working with us in the beauty space and more than 10,00,000 listings. We are working on creating an immersive technology experience for the products. Last year we launched a virtual try-on and saw heightened traction. This year we are launching Skin Analyser — Indians use just four beauty products when compared to 22 products used by consumers in Japan. The Skin Analyser is an immersive tool where consumers can take selfies and the skin is analysed with AI parameters and recommends products suited for your skin problems. A person in Tier 2 that does not have access to product knowledge will now know which is the right brand, the right shade that will be accessible at the fingertip. We believe it is going to be revolutionary for skincare in India.
How is AI driving consumer insights and sales for Flipkart?
We have been using AI in various formats as recommendations are personalised based on customers’ behaviour and search pattern to feed the right and relevant content. Our catalogue images leverage AI to gauge the quality of the product that has been uploaded by the seller. AI enables us to throw the right preferences with affordability to consumers. We are getting into the next stage of AI, where it becomes educational, participative, and informative to customers.
How has a partnership with regional influencers helped Flipkart gain customers?
50 million of the e-commerce shoppers Flipkart acquired during the pandemic came from Tier 2 and Tier 3 cities. We currently have 180-190 million shoppers on the platform. We realised that the customers that are new to e-commerce seek validation, trust and information, and they do not want to go through the usual way of product description and catalogue information. That is when we introduced the concept of influencers, and last year we experimented with 400 of them. One of the campaigns was only focused on micro-influencers and regional influencers from Assam, Manipur, Gujarat, and so on. We saw more than 1.5x conversions as a result of our engagement with the influencers. There are higher basket sizes and higher retention and customers return less because they make an informed purchase that has been influenced by the influencer.
How is Flipkart expanding its base in the FMCG space?
The expansion in FMCG will be based on adding new products and brands. Last year, we launched 400 new products. We do a lot of co-creation with the brands, a lot of brands started with just one product, but the insights we have on what customers are looking at enable us to work with partners in filling up white spaces. Our brands have expanded into multiple categories from where they have started which gives more options to customers.