From being an e-commerce marketplace to launching its own phones, Flipkart has come a long way.
Flipkart has announced it will launch its first flagship phone, the Billion Capture Plus, on 15th November. The phone is a part of Flipkart’s Billion label, through which the company produces everything from mixers to backpacks. It now also produces phones.
Flipkart’s Billion Capture Plus phone appears to focus on its camera. Flipkart calls it a “state-of-the-art dual camera phone that truly captures India’s vibrant colours.” The phone will run Android Nougat, and will have a full HD display. The phone will be priced at Rs. 10,999 for the 32GB model and at Rs. 12,999 for the 64GB model, and will be available exclusively on Flipkart.
The Billion Capture Plus says it will capture great images, but it’ll also allow Flipkart to capture is bigger margins on the smartphone value chain. Smartphones account for as much as 60% of revenue for e-commerce marketplaces, but marketplaces only act as intermediaries — companies such as Samsung, Xiaomi, or Micromax produce these phones, with marketplaces getting a commission for each sale. By branding its own phones, Flipkart will be able to cut out the middleman from of its most popular product categories.
Flipkart, of course, won’t set out to manufacture the components of the phone — the phone will likely be only assembled and branded by Flipkart. It’s something the Billion brand sets out to do — it aims to use the behavioural insights Flipkart has collected over a decade of selling items on its marketplace, and start manufacturing its own items. These insights have led to some interesting product developments — Flipkart says that after it realized Indian customers were making repetitions while cooking, it started manufacturing mixers under the Billion brand that had bigger jars. Billion’s mixer also has longer cords than other brands because Indian kitchens often have only one plug point.
It remains to be seen how Flipkart will use the years of insights gained from selling phones into finally creating its own. It helps that Flipkart recently acquired a phone repair company, F1 Info Solutions, so it will provide Billion Capture Plus’s customers access to service centers in 125 cities and towns across the country. What also remains to be seen is how other smartphone manufacturers will react to Flipkart launching its own phones — it’s likely Flipkart will promote its own phones heavily during their launch, and this might hit the sales of phones from other brands, who might be less inclined to depend solely on Flipkart for their own launches.
It’s not unusual for aggregators to start creating version of their own product. Netflix started aggregating movies and TV shows, but some of its most popular shows are the ones it creates itself, and closer home, Oyo, which aggregates hotels, now has been creating its own Oyo townhouses. It’s a popular strategy in retail too — Future group owns the supply chains of several of its own brands. Likewise, the launch of Billion Capture Plus phone could help improve profitability at Flipkart, and given how disproportionately phones contribute to its overall sales, mark a significant moment in its decade-long history.