Why is Flipkart entering the video content space?

Industry experts feel Flipkart is trying to get users to spend more time on its app. And one way of doing this is by adding original content on the app

by Dolly Mahayan
Published - Aug 12, 2019 8:11 AM Updated: Aug 12, 2019 8:03 PM

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India’s e-commerce giant Flipkart recently announced the revamping of its app. The decision is aimed at attracting a new consumer base. The updated app will see features such as video content, audio- visual assistant and support for Hindi language.

The development has led to speculations if the company will enter the OTT segment? Competitor Amazon has already entered the video streaming sector and has created a niche for itself.

Flipkart recently appointed Neha Toteja as the Head of OTT service. According to the company the decision behind the move to revamp the app is to have an engagement with the users.

“We will tap 200 million internet users who are new to e-commerce in a seamless and faster way. This set of consumers don’t want to watch video content after a pay wall. To address that set of customer base, we will offer curated content in the form of web series, short-form and long-form videos on the app,” a company spokesperson told exchange4media.

The company rejected speculations that it is entering the OTT market. “We are a commerce platform; we have no plans to enter the OTT segment. We don’t want to enter the zone. Our strategy is completely different and we are not in competition with any OTT platform,” said the spokesperson.

Flipkart won’t launch a separate application to stream video content; the segment will be built in the app only. It is expected to be up around October, during the festive season.

According to industry experts, Flipkart is trying to get users to spend more time on its app. And one way of doing this is by adding original content/programmes on the app.

“Flipkart’s decision to revamp its app is aimed at making its mobile-based shopping experience seamless and enhanced. As video consumption on mobile increases, the entry of Flipkart into the video content is a logical extension of the brand,” opines Prateek Kumar, CEO & Managing Director, NeoNiche.

The fact that Netflix has come out with a mobile-only subscription plan exclusively for the Indian market this month only is proof for the same, he says.

“Flipkart is strengthening its presence in the retail market via mobile. And this will go a long way in improving the brand's reach and have a positive impact on sales.”Kumar adds.

Khushbu Kaushal, Vice President - Shopper, Geometry Encompass believes Flipkart is going with the times. "If you want to increase customers dwell time on app then what better way to lead with than entertainment. Not just that, it also helps opening up alternate revenue stream for the brand. It’s a smart move and just about at the right time too," she adds.

A possible future plan could even be adding interesting video content in Flipkart's app where users can do in-video shopping, for example, buy the look a certain actor or actress is wearing, says Advith Dhuddhu, CEO of creative ad tech agency AliveNow.

So, does keeping the subscription free is an attempt to have an edge over other brands?

“It definitely is. If Flipkart plans to have the complete library of content for free it could be a very interesting move. The most important thing is that they focus on trying to get great original content for regional languages, because for English language, Netflix and Amazon Prime are hard to beat,” opines Advith.

“Yes, this is a great way to build a customer base,” believes Kumar.

“Once consumers get hooked, they may not mind switching to a paid subscription. This strategy is very popular among tech and OTT brands many of whom have used a similar strategy to build their base. The subscription-free model works well in all markets and appeals to consumers who want to try first and buy later,” he adds.

Kaushal , however, says free content does not mean loyalty to the brand, or increase in dwell time on the commerce side. “Consumers select content by quality, not by what’s free, and the audience that consumes free content does always guarantee loyalty. The other question is of quality, if free content does not generate revenue then it stands to fall into the trap of poor production which will not help Flipkart in the long run. Keeping subscription free will give a limited edge but will not prove to be a better choice among the competition that exists,” she adds.

The current overall revenue generated from streaming services in India stands at Rs 4,462 crore with players like Hotstar, Zee5, ALTBalaji, Voot and Eros Now being the main players, as per media reports.

 

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