GoJavas, which has temporarily suspended its operations, is planning for a major overhaul of its business. According to a report in ET, the firm is restructuring its business model and is considering to move to a franchise business model. Reportedly, the main aim of the company behind this move is to cut down its workforce.
The ET report cites two people aware of the development who revealed that the move could affect employees across all categories. Under the franchise business model, GoJavas will offer its technology to logistics partners who decide to come onboard.
One of the persons also said that the company may also adopt a variable pay model. As per the model, the company will pay per packet or per Kg of load handles in addition to a fixed basic pay. The model is similar to that followed by online taxi aggregators to pay their drivers.
GoJavas declined to comment on the report. However, interestingly the company admitted that it was open to discussions with investors hinting towards possible acquisition in future.
GoJavas remains open to discussions with all our investors,
said one of the spokespersons.
Notably, Snapdeal is the top contender to acquire GoJavas for almost a year now. It already holds over 42% stake in the company with an investment of around 237 crores in the logistics company.
It was close to complete acquisition process last month but GoJavas apparently walked out of the deal at the last moment. GoJavas also came under the controversy along with Jabong senior executives after a Twitter leak of an investigation by Rocket Internet.
Yesterday, the company had suspended its operations citing technical reasons behind it. It has not yet resumed the operations and did not disclose when it plans to do that.
Commenting on this, the GoJavas spokesperson said,
The exact time till when the operations will be affected cannot be confirmed as we need to ensure that a thorough testing is done before we resume service to all our clients.
GoJavas also handles last mile delivery operations of Snapdeal. However, Snapdeal carries a majority of its shipments through its in-house logistics company Vulcan Express. It has invested over 36 crores to build a network of warehouses and fulfilment centres under Vulcan.
Recently, it opened 6 new mega logistics hubs under the Vulcan, which now has 10 such centres in its network. The addition of GoJavas to Snapdeal’s logistics network can significantly boost the delivery operations of the e-commerce company.