Paytm Pi­lot to De­liver Via Ekart

Boost for Flip­kart’s lo­gis­tics sub­sidiary

The Economic Times - - Front Page - Aditi.Shri­vas­tava1 @times­group.com

Join­ing Hands

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.

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