Flipkart pushes logistics arm in festive season

By Alnoor Peermohamed , Business Standard, Bengaluru | In Digital | September 27, 2016
Opened to third-party merchants earlier this year, Ekart already supports rivals such as Paytm and Shopclues.

Flipkart will use the festive season e-commerce demand to boost the business of its logistics arm Ekart.

Co-founder Binny Bansal is leveraging Flipkart's investments in warehouses and digital maps to optimise delivery of goods to smaller towns. Opened to merchants earlier this year, Ekart supports rivals such as Paytm, Shopclues and offline players such as Madura Garments and Apollo Hospitals.

Ekart has committed to investing $2.5 billion in warehousing and logistics over the next few years.

"We are seeing a lot of interest from companies to use our logistics. We were working with Jabong before we acquired it," said Bansal in an interview with Business Standard last week.

The e-commerce industry is is expected to see a four-fold jump in daily orders during festive sales that start in early October. While Flipkart, Snapdeal and Amazon rake in most of the orders, smaller players, too, see sales spiking during the Diwali week. Flipkart is pitching Ekart as a delivery option to merchants without their own logistics units. It is also pushing Ekart as a solution for other e-tailers to do away with their logistics units.

"We are going to name more customers who use our supply chain. We are building a supply chain business along with the e-commerce business," Bansal added.

Flipkart has made investments in start-ups such as BlackBuck, a freight booking platform; QikPod, which provides electronic lockers from where customers can pick up their deliveries; and MapMyIndia, which has better small-town location data than Google.

Flipkart launched Ekart Courier in May, allowing people to have packages picked up from home and shipped anywhere across the country.

Amazon, has 23 fulfilment centres and the largest storage space among e-commerce firms, but the company uses its logistics network only to fulfill orders booked on its platform.

With 18 warehouses, Flipkart is trying to build Ekart to take pressure off the e-commerce business to turn profitable soon.