India’s e-commerce giant Flipkart has infused $257 million (Rs 1632 crore) in its logistics arm Ekart, which is operated by Instakart Services. The amount was invested in three tranches through Singapore-based group company Klick2Shop Logistics Services International Pte from October and November.
On October 9, 2017, Klick2Shop invested $50.8 million followed by 2 more rounds of investment in November. On November 7, 2017, Klick2Shop infused another $50.8 million and then $154 million more on November 27, 2017. The filings also revealed that Flipkart has allocated $460 million to Ekart for executing all the investment deals. Also, in September 2017, Flipkart invested around $98 million in Ekart via the Singapore based Klick2Shop Logistics Services International.
In August, Flipkart raised a gargantuan funding round of $4 billion after which, it has been continuously improving their logistics core. Apart from this investment in Ekart, the company is also taking several steps to increase their warehouse space. Other giants like Paytm Mall and Amazon are constantly striving to make a prominent mark into India’s e-commerce space. Supply chain and logistics are two of the most capital-intensive fields in any e-commerce business. So Flipkart is constantly trying to find ways that will help them in reducing costs for each delivery.To survive in the game, Flipkart is planning to introduce a one-stop hyperlocal app to cater all needs of the Indian consumer that will include a wide range of products from groceries to electronics. For this to happen, it is highly essential for Flipkart to strengthen their logistics.
The investment also comes in line with the plans of CEO Kalyan Krishnamurthy to expand the user base from $10 million to 80 million. It further aims to increase the horizon of services if offers by targeting alliances with platforms in different verticals like Zomato, Swiggy, BookMyShow and more.
The logistics market has gained the attention of a number of colossal investors in the last 12-18 months. In March 2017, Delhivery raised $100 million from Carlyle Asia Partners and existing investors. In the same month, Ecom Express also raised around $75 million. There are reports floating in the market that China’s e-commerce giant Alibaba is going to infuse $100 million in Pune based XpressBees.
Flipkart can soon open new fulfillment centers similar to that of Amazon India to penetrate deeper into the tier II and tier III cities in the year 2018.