Wednesday, May 18, 2016

FLIPKART LOGISTICS GROUP MOVES INTO COURIER BUSINESS IN INDIA

Flipkart arm forays into courier business

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BENGALURU: Flipkart.s logistics arm EKart is entering the C2C (consumer-to-consumer) courier service segment starting next week via EKart Courier, a senior executive at the company told TOI.

Leveraging the existing network of EKart, delivery executives will pick up packages from the customer's doorstep—once the courier order is placed online—and deliver them across India, along with providing packaging services. The logistics business got a boost when Binny Bansal took over as CEO of Flipkart.

The courier service will be first rolled out in Bengaluru, and then in other big cities like Delhi, Mumbai and Kolkata over the next few months. Initially, EKart will provide two to four-day delivery time line, but is working on bringing in the overnight option as well — at a premium, of course.

"We ran the pilot for a few months and realized the void in the courier market, which is largely unorganized. Making sure the pick-up is executed on time and providing packaging to ensure safety is the unique proposition to our model. Existing tech infrastructure will play a key role in ensuring good margins. We are looking to corner about 5-10% market share over a period of one year," said Amitesh Jha, VP at EKart.

According to Jha, the new line of business is not competing with the likes of India Post, which has the highest reach across the country. "We are targeting only tier 1 markets now and our focus is on executing the whole process efficiently, proving the best possible experience," he said. At present, EKart claims to fulfil about 3.5 lakh orders.

The fragmented C2C courier market is estimated to be about Rs 200 crore, with many small, regional players apart from new-age companies such as Parcelled, which operate in tier 1 markets.


Bansal, who took over as CEO of Flipkart in January this year, has been making aggressive moves backing the logistics business, which he has said will be a big lever in generating cash flows. Bansal has big plans for EKart, starting with capital infusion to building a new team to look after its operations. The e-tailer is looking to run the logistics business independently, it is believed.


"There is a significant opportunity in the gifting market via this route. It is not only the typical 'documents' courier that we are targeting via this channel, but at delivering personal packages which would usually be not delivered via existing agencies safely," Jha added.


EKart has an employee strength of about 14,500 people spread across various channels of business that the logistics arm of largest e-tailer is involved in.