Flush with $2.4 billion of funds, Flipkart is eyeing to foray into multiple sectors to accelerate its topline. The Bengaluru-based company is now all set to sell insurance products on its platform. It will initially begin selling products in general, life and health insurance and later add motor insurance as well.
The Softbank-backed company will launch insurance products after getting the regulatory approval from the Insurance Regulatory and Development Authority (IRDA). According to a VCCircle report, regulations allow Flipkart to partner with maximum three insurers in each insurance vertical.
Flipkart will have a full-stack approach while selling insurance. It will offer the entire gamut of services ranging from discovery, transaction, payment, delivery to after-sales services.
Entrackr had reported in June about Flipkart’s intention to enter financial and insurance sectors.
While the exact timeline of Flipkart’s entry into insurance products selling is not known, sources inside the company indicate that it will kick-off early next year. It’s also not clear whether it had already obtained required IRDA approval for selling insurance or not.
Why is Flipkart entering insurance, grocery etc.?
E-commerce sales in India were just around $14-14.5 billion in 2016, a meager increment from 2015. As per Kalyan Krishnamurthy, Chief Executive of Flipkart, the base of online shoppers has stagnant with only 10 million unique shoppers, who are transacting every month.
Over the past two years, analysts, investors, and forecasting firms had overestimated the size and potential of the e-commerce market in India.
With $4 billion of cash on its balance sheet, Flipkart is eyeing investment in new verticals and peripheral segments to drive more transaction. Earlier this month, it re-entered the grocery segment while the company is also slated to invest $100 million in food delivery platform Swiggy to eat a significant pie of food-tech segment.
Importantly, the Krishnamurthy-led company is planning to launch WeChat kind of app to aggregate several services. Flipkart’s arch-rival Amazon had invested in insurance and banking products marketplace Bankabazaar.
Distribution of insurance and other financial products make sense for Flipkart as it can leverage the power of over 100 million registered user base. The company has been eyeing to leverage its reach and cross-sell products in peripheral verticals.