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Flipkart to up its logistics game to take on Amazon

The logistics parks will have warehouses and act as a freight aggregation and distribution hub powered by intelligent transportation systems.

Apr 24, 2019 by The Passage Team
Flipkart to up its logistics game to take on Amazon

Walmart-owned Flipkart is in the process of procuring 300 acres of land in Karnataka, Gurgaon and West Bengal to set up logistics parks, Business Standard reported. The e-commerce market place is going all out to take advantage of the next wave of e-commerce growth in India.

Flipkart is likely to pump Rs 5,000 crore to build the parks and, consequently, create around 50,000 direct and indirect jobs, BS reported citing sources in know of the development.

“The Flipkart team is sourcing land privately in Bengaluru, and has identified four sites. In West Bengal, construction is expected to expected to start soon. For Gurugram, land has already been identified for the purpose,” a source told Business Standard.

The logistics parks will have warehouses and act as a freight aggregation and distribution hub powered by intelligent transportation systems. The Indian online retail market is expected to touch USD 200 billion by 2028, according to Morgan Stanley’s projections.

The infrastructure would help Flipkart to tap the next 200 million customers, the company’s spokesperson told Business Standard. Amazon India and Flipkart have been slugging it out last few years for a larger market share in India. With Reliance set to enter the fray, the e-commerce market place is anybody’s game now.

Last April, MakeMyTrip and Flipkart announced a strategic partnership. “The new partnership will start with a rollout of domestic flight bookings in the next few weeks, followed by hotels, buses and holiday bookings,” Flipkart had announced at the time.

Amazon India also has plans to add food delivery, cab booking and hotel reservation services to its catalogue. The move is in alignment with the Seattle-based tech giant's overarching ambitions to morph into a Super App.

The spokesperson also rubbished the rumours surrounding the possible exit of Flipkart CEO Kalyan Krishnamurthy.

Walmart CEO has recently visited the Flipkart team in Bangalore. “I met with Kalyan Krishnamurthy, Sameer Nigam, and their leadership teams and was excited to see how the Flipkart, Myntra and PhonePe teams are driving the industry with innovative solutions to serve its diverse and growing ecosystem,” McMillan had said in a statement. “There is tremendous progress and we are naking a difference. Kalyan, Sameer and their teams have our full support to continue executing the growth strategy for our e-commerce business in India,” McMillon said.

In March, Walmart said the acquisition of Flipkart for USD16 billion negatively impacted its net income in 2018-19 (FY19), and the trend would bleed over to 2019-20 as well. Walmart had posted a 2.8% growth in revenue from USD 500 billion in FY18 to USD 514 billion in FY19.

The Passage Team

The Passage is committed to creating in-depth content over technology industry across Asia with a focus on emerging startups in the technology, healthcare, education, food, tech, travel & mobility segments.

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