Flipkart Likely To Limit ‘Minutes’ Expansion To Rein In Costs: Report

As it gears up for an IPO, Walmart-owned ecommerce giant Flipkart is reportedly planning to limit the expansion of its quick commerce platform, Minutes, to the top six to eight cities to reduce cash burn.

“More than 90% of the quick commerce volumes are generated from the top eight cities and a bulk of this comes from Delhi NCR, Mumbai and Bengaluru where Flipkart is going deeper with Minutes,” ET quoted a source as saying. 

Queries sent to Flipkart did not elicit any response till the time of publishing this story. 

The move to rein in the company’s quick commerce expansion spree stands in contrast to what Flipkart CEO Kalyan Krishnamurthy said barely a month ago. In April, he said that the ecommerce major was looking to increase the dark store count of Minutes to 800 by the end of 2025. So, why has the company suddenly taken a sharp turn and put brakes on ecommerce expansion?

What’s Behind Flipkart’s U-Turn?

Flipkart seems to have come to the conclusion that quick commerce is largely a “metro game”. Last month, Krishnamurthy emphasised that the affluent consumer segment in the top 30-40 cities of the country has developed a “propensity” to engage with ecommerce service providers with a focus on short delivery timelines and convenience.

In this context, the company appears to be focussing its energies on the top metro cities for quick commerce. The ecommerce juggernaut has set its eyes on expanding the dark store count for its quick commerce offering to 500-550 ahead of the flagship ‘Big Billion Days’ sale later this year, as per the ET report.

Flipkart Minutes, which competes with Eternal-owned Blinkit, Swiggy Instamart, Zepto, and BigBasket’s BB Now, is currently operational in 14 cities and runs a network of more than 300 dark stores, or mini warehouses. 

That said, Flipkart’s new strategy appears to be at odds with what is going on in the broader quick commerce ecosystem. The likes of Blinkit, Swiggy Instamart and Zepto, foregoing short-term profitability, have raised billions of dollars in the past year to aggressively expand their dark store count, attract more customers. 

Meanwhile, Reliance Retail is developing a vast store network for JioMart’s 30-minute deliveries via a hybrid model. 

Slashing Losses Takes Front Seat Amid IPO Plans

Flipkart’s move comes a month after it was reported that it received an infusion of INR 3,248.9 Cr in its marketplace arm, Flipkart Internet, from its Singapore-based holding entity. So, why has the company revamped its quick commerce play?

By treading carefully on the quick commerce front, Flipkart is taking a more careful approach towards expansion. This largely stems from the fact that Flipkart wants to slash losses and rein in cash burn as it heads for an IPO next year. 

Analysts at brokerage firm HSBC Securities, in a May 12 research note, echoed similar sentiments and noted that the Walmart-owned company is under pressure to halve its current cash burn of around $40 Mn a month over the course of next few quarters. 

It is pertinent to mention that last month, Flipkart’s board cleared the company’s proposal to shift its domicile from Singapore to India, ahead of a planned IPO in 2026. 

Amid all these, the company is also seeing a churn at its top level. Earlier today, it was reported that multiple key leaders, including Ankit Jain, SVP and head of grocery and large supply chain, and Jeyandran Venugopal, chief technology officer, have left the company. 

On the financial front, Flipkart Internet’s revenue jumped 21% year-on-year (YoY) to INR 17,907.3 Cr in FY24 while its loss narrowed 41% YoY to INR 2,358 Cr.