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Flipkart Retain Its Logistics Arm Ekart

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About Flipkart

Flipkart is an e-commerce giant founded in 2007 by Sachin Bansal and Binny Bansal. It operates in India; it is headquartered in Bangalore, Karnataka. Back in 2007, when Flipkart was launched, Indian e-commerce industry was taking its beginner steps. Sachin Bansal and BinnyBansal, who were working for Amazon.com, had an idea to start an e-commerce company in India.

Flipkart.com is India’s leading e-commerce marketplace with over 30 million products and 70+ categories.

Flipkart is known for innovation, they took e-retail into next level with revolutionized online shopping like never before. Let’s see the journey of Flipkart! Flipkart’s journey from a small e-book e-retailer to India’s largest e-commerce platform inspires a generation of start-ups. Flipkart managed to break the norm and change the ecommerce industry in India forever. Flipkart’s journey proves an idea can change, you must focus on determination for success.

Shopping on Flipkart.com – Forget crowded malls, endless maze-like parking lots and long lines. From clothes to mobiles phones, we can buy anything online just from click. Flipkart.com, one of India’s best online shopping destinations. No more repeated trips to the mall. No more getting stuck in endless traffic. When you log into Flipkart.com, we will find all the elements of shopping in malls have been exceptionally replicated. The easy-to-use interface that includes filters, compare options, buying guides, interactive descriptions and reviews.

Business Objectives Of Flipkart

  • Accessibility of all products, physical and digital.
  • Promote online shopping, COD, EMI and 30 day replacement policy.
  • Affordability and Availability on time.
  • Diversity in the product category and range.

Major wave in e-commerce field by trend setters Flipkart, Flipkart has bought back its logistics service company from WS Retail.

According to Mint, the acquisition has been made through a new entity called Instakart Services Pvt Ltd, which was registered in June and has Ankit Nagori (Chief Business Officer, Flipkart) and Rajnish Singh Baweja (Finance controller of Flipkart) as the company’s shareholders and directors. Interestingly Instakart is owned by rival company Amazon for groceries.

Earlier in January, WS Retail was looking to spin off its logistics arm Ekart, into a separate entity to make the privately held company comply with regulatory requirements of different states.

This deal of WS Retail will only have trading business which is estimated to gradually sore down as Flipkart shifted to a marketplace model from an inventory-led one in 2013. WS Retail’s plan to make Ekart subsidiaries the trend witnessed in the industry after online fashion retailer Jabong.com spun off its logistics arm Go Javas into a separate entity in 2013. As per experts talk, this deal makes sense as the parent company can then focus on its core business.

Understanding the Operation of WS Retail Services Pvt. Ltd. As A Subsidiary of Flipkart Pvt. Ltd

Flipkart created WS Retail in 2009 as a seller on its site due to strict FDI rules set by government. Bangalore-based WS Retail bought goods from Flipkart India Pvt. Ltd, the B2B (business-to-business) arm of the main group holding company and sold the same goods to customers on Flipkart’s site. WS Retail also owned and ran Flipkart’s key logistics business called ekart that delivered products to customers. WS Retail is top seller on Flipkart site as well.

Til 2012, WS Retail was owned by Flipkart co-founders Sachin Bansal and Binny Bansal. However, they were forced to sell their stakes to a group of Indian investors which led to their resignation from the board in 2012.

After the stake sale, two of Flipkart’s early employees, Sujeet Kumar and Tapas Rudrapatna, controlled roughly 46% of WS Retail. Kumar was the de facto head of WS Retail and ran the logistics business until he left the company earlier this year.

WS Retail was legally separated from the Flipkart founders and its venture capital investors two years ago and earned whopping $475 Mn above (INR 3,135.3 Cr) in 2013-14.

Flipkart backing from foreign investors cannot sell directly to consumers, but can allow local retailer’s like WS Retail to use its platform.

Both WS Retailer and Ekart work at arms distance from Flipkart and it is just a client for us them, they doesn’t have any plan for carrying out delivery operations for other e-tailers.

Ekart ships 85 percent of products ordered on Flipkart, with Sujeet Kumar of Ekart told that the delivery arm may not be able to keep up with demand when Flipkart scales up operations, as hiring more delivery staff, training them and getting police verifications done will be a challenging task to Flipkart.

So Flipkart now should focus more on value-added services like helping the online retailer when consumers return products with return policy. So Ekart think the share of shipments done by third-party logistics companies, they also looking to double the profits and shares in coming months.

Conclusion

We can learn something more from huge e-commerce giants Flipkart, for satisfying the customers and fulfilling the orders in quick time they can do anything.

Image Credits: Flipkart

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