Flipkart unit is set to introduce a free video streaming service

Flipkart unit is set to introduce a free video streaming service to draw new users from small towns and cities in India and take on rival Amazon’s Prime Video service.

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Flipkart is eyeing the next 200 million consumers who are coming online. The company believes that most consumers are introduced to the internet through online videos. Hence, video content and entertainment could play a big role in getting consumers to come and buy online.

“We believe that great content, if made available to a wider base of consumers, especially the ones who are new to e-commerce but not internet, can bring them on board on an everyday basis and help take away any anxiety that they may have towards online shopping,” Flipkart group chief executive Kalyan Krishnamurthy said in a statement on Monday at the launch of Flipkart Videos, a curated range of movies, shows and entertainment series. Customers, he added, should not pay extra for premium content.

The video content offering is focused on three primary aspects: it’s free, curated and personalized.

Experts say the content market is still evolving, considering the number of customers paying partly or fully for subscriptions to Netflix, Amazon Prime and Hotstar.

“It’s still a small number. The pricing is too high for a customer base that is accustomed to free or cheap content,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight. “Also, there is a lot of fluidity in terms of the platforms used. In India, content and pricing will be critical.” He added that both Netflix and Amazon Prime are “Indianizing” their content in a big way. Pricing dynamics are being worked out as well.

Amazon India started its Prime video service in December 2016 and has since developed a strong fan base with hit shows such as Made in Heaven and Mirzapur.

The big question is—will people watching the particular content eventually buy the products on the platform? It needs a mental switch—the mindset while shopping is very different from what it is while watching a movie or a series.

According to Krishnamurthy, the focus is on attracting customers, particularly those in the age group of 20-30 and those who consume a lot of user-generated and professionally created content.

“We want to ensure that a user keeps coming to the platform every day. Over time, we will figure out how this ties into the e-commerce ecosystem, but today that’s not the objective. Its just to ensure that the consumer is hooked to Flipkart,” Krishnamurthy said in an interview.

Dutta, however, believes that there may be another reason for Flipkart’s video streaming service. “It may be less expensive or more profitable to service existing customers by expanding the share of wallet than to acquire new customers. Hence, companies try to add as many products or services to the customer relationship as possible,” he said.

According to Dutta, the metrics and operating levers of merchandise and streaming content businesses are very different. “Done well, content may add to a group’s revenues, but operationally it has to be managed with a very different business mindset,” said Dutta.

India’s video streaming industry is set to grow at an annual average pace of 21.8% to reach ₹11,977 crore by 2023, according to a report by global accounting firm PwC.

Subscription-based video-on-demand platforms are projected to grow at an average yearly rate of 23.3% to reach ₹10,712 crore between 2018 and 2023.

The 34 companies present in the cluttered market comprise US platforms such as Netflix and Amazon Prime Video, as well as Indian services such as ZEE5, Voot, Eros Now and ALTBalaji.

In the meantime, Flipkart is launching its service in Hindi with a Hindi-language “audio visual guided navigation” to enable easy on-boarding for new consumers.

It is also redesigning its app, which will allow users to access their preferred language, curated entertainment content and content feeds through the navigation bar at the bottom of the home page.

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