Shopsy: A Case Study of Flipkart’s Shopsy Initiative and How it Works

You must be wondering what the main difference is between Shopsy and Flipkart. Is it the budget version of Flipkart? Or is it made on the same model as Meesho? How does this company strategize to defeat its competitors? You will get all the answers to the aforementioned questions in this article.

What is Shopsy?

Flipkart introduced Shopsy in July 2021 as a mobile app allowing people in India to launch their online reseller businesses. By August 2021, the app had adopted a zero-commission marketplace model. Later, Shopsy shifted its focus to become a B2C company. In December 2021, the app launched e-grocery services across 700 cities in India. In March 2022, Shopsy appointed Indian actor Sara Ali Khan as its brand ambassador.

This allows people belonging to mostly tier-2 cities who come under lower income categories to shop online for goods at effective prices and provides them with a wide range of selections in all categories. The best-selling items on the following platform are clothing and electronics

The beginning

On July 21, 2021, the Shopsy app was made available by Walmart-owned online retailer Flipkart, allowing Indians to launch their online businesses with no upfront costs. 

Users of Shopsy are able to share catalogs of a large selection of the 15 crore products offered by Flipkart sellers, giving them the power to influence their local network and realize their aspirations. These range across fashion, beauty, mobiles, electronics, and home, with potential customers via popular social media and messaging apps.

According to Flipkart, groceries on Shopsy will be available in 700 cities and 5,800 pin codes. It matches the variety and selection offered on Flipkart Grocery by offering 6,000 products across 230 categories, including staples, fast-moving consumer goods, and other dry groceries.

The Shopsy app enables individuals, and local business owners to become social media resellers of various goods. They can get orders on the platform and receive a commission by sending catalogs to prospective customers on various social media and messaging services.

Shopsy’s laser sharp vision and mission

Flipkart’s latest offering Shopsy announced the launch of a zero-commission marketplace. It assists in organizing and bringing smaller vendors in the fashion, grocery, and home industries online through this initiative. 

This will boost e-commerce growth in tier 2 cities and towns that have not yet experienced the benefits of digital retail by further enabling and amplifying the supply of goods and catalogs on the platform. 

According to Prakash Sikaria (Senior Vice President), he quoted “Our vision with Shopsy is to enable digital commerce for everyone across India. We have received an overwhelming response and are further looking to enable several initiatives on the platform to accelerate growth. 

Shopsy is growing 100% week on week. The platform is demonstrating the behaviour of a typical social app and virality is starting to kick in. To further expedite this, we aim to bring the best of e-commerce to social commerce as we progress in our journey. 

The Flipkart group has been committed to constantly expanding the scope of e-commerce, and Shopsy is an important step in that direction.”

Shopsy’s business model

The difference between Shopsy and Flipkart’s business model is that Flipkart involves commission from online sellers, while Shopsy enables vendors to sell their products with 0% commission within the price range of (Rs 150 – 699).

Shopsy by Flipkart requires almost no trademark registration for sellers, making it even more useful to small-scale businesses.

The bonus feature is that the app requires no professional photoshoot, which is light on pocket and enables sellers to post images via their own mobile phones.

Shopsy also generates revenue from ads and sponsored products by selling the services to those businesses that want to capture the public eyes in less time and with accuracy.

Shopsy’s marketing strategy

Shopsy has a solid social media presence on platforms like Instagram and YouTube, where it regularly uploads its commercials and puts them on TV channels. 

Shopsy also uses superstar branding in order to capture the masses, For instance, Sara Ali Khan was appointed as a brand ambassador in 2022.

According to a report by the advertising firm Dentsu, the domestic advertising industry has been expanding at a rate of 18.1% since 2021, with a market value of $85,769 crore.

Difference between Flipkart and Shopsy

1. Business model

Although both Flipkart and Shopsy are e-commerce platforms with headquarters in India, there are some distinctions between the two.

Flipkart is one of India’s most important e-commerce platforms. It was established in 2007 and provides a variety of goods, such as groceries, books, clothing, home appliances, and electronics. 

Additionally, Flipkart provides services like flight bookings, bill payments, and mobile recharges. It functions as a marketplace and lets independent sellers list their goods there.

Shopsy sellers can create their own product collections, share them on social media with their friends and family, and make money from sales commissions. Shopsy is designed for people who want to launch their own small businesses without the costs associated with established e-commerce platforms.

In conclusion, Shopsy is a social commerce platform that enables people to become sellers and earn commissions on sales through their social networks, as opposed to Flipkart, which is a traditional e-commerce platform with a wide selection of goods and services.

2. Marketing

While Flipkart mostly relies on its special day sales to capture a huge market. Contrarily, Shopsy provides users with different discounts every day for 365 days.

Shopsy relies more on social media ads while Flipkart’s overall presence in advertisements can be seen nationwide ranging from TV ads to Public hoardings.

Flipkarts loves to implement unique ways of marketing like taking children into the roles of generic adults who discuss everyday problems in a mature way and find their solutions on the app. These strategies have made Flipkart capture a greater market share in India and successfully made it a household name. 

Contrarily, Shopsy uses popular faces like Sara Ali Khan to endorse the Shopsy App in order to enter the common man’s home and become an everyday phenomenon using influential personalities.

Growth of Shopsy

Valuation

Over the course of three rounds, $318K in funding was raised by Shopsy. On March 27, 2023, they received their most recent funding from a Seed round.

According to a recent report by Bain & Company and venture capital firm Sequoia Capital, the social commerce market is currently valued at $1.5-2 billion and is predicted to reach $70 billion by 2030.

Shopsy, has already surpassed 100 million users this year, well ahead of schedule. It is now among the biggest platforms of its kind in the nation as a result. The Covid-19 pandemic has accelerated the shift to e-commerce, and more customers are using Flipkart’s Shopsy platform more frequently.

Revenue

According to a statement released by the company on November 30, revenue for Flipkart’s social commerce platform Shopsy increased four times over the non-festive season.

While Flipkart did not comment on specific numbers, according to sources, Shopsy hit the $100 million mark last month on the back of festive sales. 

According to reports by Moneycontrol, Flipkart has set a GMV target of $1.5 billion for Shopsy alone by the end of 2022.

Shopsy’s major competitor

Meesho

Two cutting-edge platforms in India’s booming eCommerce market, Meesho and Shopsy, have carved out a niche for themselves by meeting the needs of their intended customers. 

Meesho, a platform that focuses on reselling, enables users to purchase goods at deep discounts and resell them to friends, family members, or on other e-commerce sites like Amazon and Flipkart. This method of conducting business online has made it a well-liked option for both dropshipping and wholesaling.

By combining social media and online shopping, Shopsy, on the other hand, adopts a different approach to eCommerce. Users can find, buy, and interact with a variety of products through Facebook using this social eCommerce platform, which is supported by the eCommerce behemoth, Flipkart. 

Shopsy’s two main features, Shopsy Shop and Shopsy Host, let users create their own digital store to sell goods or buy items from any brand’s page or product catalog, offering a seamless buying and selling experience for users.

Both platforms aim to reach the rising number of internet users in Indian small towns and cities, who make up a similar portion of their target market. Meesho and Shopsy are particularly appealing to hyperlocal entrepreneurs, drop shippers, and those seeking value-based products in Tier 2-3 towns.

Conclusion

All in All, Shopsy is a great opportunity for small business owners to scale their businesses with the Internet and tools, while also receiving aid in marketing, logistics, and CSR from the company. Likewise, for the shoppers, Shopsy provides them with a wide range of products, ranging from clothing items to electronics, at an affordable price with zero commission.

Using this platform, sellers can directly access approx 500 million budget-friendly consumers with which they can expand their business.

FAQs