Flipkart invests heavily in logistics arm eKart

By

Isabelle Crossley

Published
Jan 8, 2018

​Since September of last year, Flipkart has been pumping funds into its self-owned eKart, as it works on its distribution network.

According to the Ministry of Corporate Affairs, Instakart Services Pvt. Ltd, the parent company of eKart, has received four separate tranches of investment from Flipkart since September 2017. This investment amounts to around 2,600 crore rupees (approximately 390 million US dollars) and the latest injection of funds by Flipkart totalled 1,200 crore rupees (approximately 180 million US dollars) as shown by documents filled on December 19.

Flipkart is currently putting a lot of work into the delivery service eKart and, since mid-2017, Flipkart’s co-Founder and group CEO Binny Bansal, has been acting as a mentor for the company. Although the company was originally intended to be Flipkart’s in-house logistics business, it was made into a separate entity for regulatory ease. The company handles Flipkart’s order fulfilment including for all clothing and fashion items.

Last year, Flipkart raised nearly three billion US dollars from investors including Japan’s SoftBank Group Corp., China’s Tencent Holdings Ltd, eBay Inc., and Microsoft Corp and the e-commerce business started the New Year by proclaiming that they were only competing with themselves when it came to who holds the top spot in the Indian e-commerce market.

Both Amazon India and Flipkart have been searching for the most cost effective solution for supply chain and logistics, the two most resource intensive areas of their business.

Moving into 2018, it appears clear that Flipkart are betting on eKart as the most cost effective way to deliver their products and their investment is showing no signs of slowing down.