Paytm Pilot to Deliver Via Ekart
Boost for Flipkart’s logistics subsidiary
Company will externalise Ekart and work with other businesses apart from Flipkart and Myntra
Ekart is headed by Saikiran Krishnamurthy, who was hired from McKinsey last year
Bengaluru: Online marketplace Paytm is piloting a service where goods shipped from its platform will be delivered by Ekart, the logistics arm of Flipkart, signalling collaboration between the leader and a fast-growing rival in the fiercely competitive e-tail sector.
Roping in a rival online marketplace is expected to boost prospects for Ekart, which is fashioning itself into an independent business while reducing dependence on a single customer — Flipkart. For Paytm, the move marks greater focus on reaching customers in smaller towns and cities which generate more than half of total orders.
“Ekart will be an interesting experiment for us,” said Vijay Shekhar Sharma, the chief executive officer of Paytm. “Since we are a marketplace, we work with different vendors to enable our merchants reach a wider consumer base.” The Alibababacked company, which is amongst the most recent entrants into the online retailing industry said it ships about1lakh orders every day.
Bengaluru-based Ekart, which has been on an aggressive growth spree since the elevation of Binny Bansal as the new chief executive officer of Flipkart, has also begun a pilot to deliver shipments for fashion portal Jabong. The Rocket Internet-backed company competes with Flipkart’s Myntra. Jabong did not reply to ET’s queries on the development.
“Ekart has the capability to transport over 5 lakh shipments from different sellers across India. We will be using the same capabilities to offer services to other companies,” said Amitesh Jha, a vice-president at Ekart. The company expects to win an equal volume of business from Flipkart and from third-party shipments by next year.
India’s top ecommerce companies including Flipkart, Amazon and Snapdeal have each set up in-house logistics companies, as they compete to deliver shipments quicker to customers.
A recent report by financial services firm India Infoline estimates that the volume of ecommerce orders will amount to 2,000 tonnes per day by fiscal 2020.
“Logistics is still broken in India and companies need to quickly build capabilities in ancillary areas and offer value-add services to customers in order to create a hook,” said Prahlad Tanwar, director for transport and logistics at KPMG.
For online retailers fighting for a share of a market expected to reach $36 billion in 2016-17 according to Goldman Sachs, delighting customers is an important tool.