The new CEO of Flipkart, Kalyan Krishnamurthy, is initiating several changes in the operations of the e-commerce player.
To bring in sharper focus on its core business model and make it nimbler, Flipkart is consolidating the operations of its logistics and supply chain arm, Ekart.
For starters, it has stopped a key service — customer-to-customer courier operations that gave users the option of having documents and parcels packed by Ekart’s delivery boys and shipped to other destinations.
A Flipkart spokesperson told
Ekart forms the backbone of the Flipkart’s business, providing the last-mile connectivity that has played a vital role in propelling the company to the premier position among e-tailers in the country. As an in-house logistics arm, Ekart has made Flipkart reach customers in the remotest corners of India, a vast network the company wanted to leverage as a customer courier service.
External contractsEkart, will however, continue to offer warehousing solutions and end-to-end logistics and supply chain capabilities to its other clients.
According to sources, Ekart has so far incurred losses of ₹810 crore. To offset the losses, Ekart is also taking on several third-party contracts, and plans to generate 50 per cent of its revenues from external clients, which at present is about 10 per cent.
In 2015, Ekart had launched an alternative delivery model for last-mile connectivity with tie-ups with local kirana stores and Apollo medical shops. During the Big Billion Sale, over 20 per cent of the deliveries happened through such a delivery model.