Flipkart enters strategic partnership with Jeeves Consumer

Bengaluru: India's biggest e-commerce company Flipkart said it entered into a strategic partnership with Jeeves Consumer Services Pvt. Ltd, which provides after-sales services on large home appliances and electronics.

Flipkart declined to give financial details, but two people familiar with the matter confirmed that Flipkart bought a stake in Jeeves. Mint first reported talks on the deal on 22 October.

Flipkart is buying into Jeeves partly because the company plans to launch its private brands in home appliances such as televisions and refrigerators as well as electronics. Flipkart has already launched a range of tablets under the Digiflip brand in June and is planning to launch private brands in the large appliances category.

Jeeves, which provides maintenance, repairs, product guarantees and other services, could also help Flipkart deal with pressure or possible moves by offline retailers and brands that have threatened to stop offering guarantees on products sold online. Jeeves has signed up with a network of brands including Samsung, Toshiba, Dell and others to provide after-sales services.

Offline retailers are fighting for survival and are lobbying hard with the state governments and Centre to curtail e-commerce companies' operations while brands complain that the artificially low prices online hurt their image. This hasn't stopped online retailers from pursuing discount-heavy, high-cash-burn strategy of attracting customers.

Flipkart, which has raised $1.8 billion from investors since starting out in 2007, including $1.2 billion this year, is looking to aggressively push sales of high-value large appliances such as TVs, refrigerators and air-conditioners.

"Our recent launch of large appliances and electronics has seen an overwhelming response. And the next logical step was for us to explore value added services like seamless delivery and installation, product demonstration and consumer guidance and extended warranty for our customers," a Flipkart spokesperson said by email. "Jeeves, with a service network spanning 250 cities and highly valuable experience of working with a variety of retail partners, is an ideal partner to help us offer exceptional post-sales support for our complete range of appliances, electronics and small appliances."

Jeeves Consumer was started by former BPL executives Alok Sen and R.N. Balasubramanya in 2007. The company was financed by Sen, Balasubramanya, some of their employees and relatives until 2012. In May 2012, early stage investor Seedfund agreed to put in about Rs12 crore in tranches for a stake that could have risen to 30% over time, documents with the Registrar of Companies show.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.