Flipkart Infuses About $98 Mn in Its Logistics Arm Ekart

Indian ecommerce major Flipkart has infused $98.4 Mn (INR 666 Cr) in its logistics arm – eKart, through a Singapore-based group firm, according to reports.

Flipkart bought back eKart from WS Retail in September 2015. The acquisition was made through a new entity called Instakart Services Pvt Ltd, and has Ankit Nagori (Chief Business Officer, Flipkart) and Rajnish Singh Baweja (Finance controller of Flipkart) as the company’s shareholders and directors.

Flipkart that boasts of about 8 Mn shipments and over 50 Mn registered users on its platform, has infused the funds in its logistics business for the second time. Prior to this, in July 2015, Klick2Shop Logistics Services International invested $18.7 Mn (INR 127 Cr) in Instakart Services. The company is targeting sales worth $10 Bn on its platform by the end of 2016.

Besides, understanding the importance of last mile delivery, Flipkart is offering its logistics services to third party ecommerce firms.

Flipkart is equipped with 17 fulfilment centres (FC) and has a total warehouse space of up to 1.6 Mn sq ft. Last yeat, Flipkart had set up its largest fulfilment centre at Gundla Pochampally, on the outskirts of Hyderabad. The company further plans to add 50-100 warehouses over the next four to five years.

eKart is being pitched to other ecommerce-focused logistics firms such as Delhivery (SSN Logistics Pvt. Ltd), Ecom Express Pvt. Ltd and Dotzot, the ecommerce arm of DTDC Express Ltd, among others, to provide last mile delivery. Myntra, which was acquired by Flipkart for $330 Mn in May 2014, has already been using eKart services. According to sources, technical integration with Jabong is underway, while Shopclues will come on board in the next two weeks.

Lately, ecommerce companies in India have been concentrating on improving their logistics. Amazon currently has over 21 FCs across 10 states with a total of over 2 Mn-sq-ft of space, which according to Akhil Saxena, director operations of Amazon India, is said to be the largest storage capacity and warehouse infrastructure created by any ecommerce company for sellers across India. It added 13 new FCs in 2015 alone, along with launching its biggest fulfilment centre (warehouse) in Kothur, Mahbubnagar district.

On the other side, Snapdeal bought a large stake in its logistics firm GoJavas to improve its speed of order deliveries. It  infused about INR 237 Cr in GoJavas for a 42% stake, in October 2015.

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