In an unlikely partnership between two of India’s biggest e-commerce rivals, Flipkart and PayTm have joined hands for delivery of PayTm goods through eKart, the logistics arm of Flipkart. And this further signifies the growing importance of a robust logistics network to support any e-commerce venture.
Paytm CEO Vijay Shekhar Sharma termed the partnership with eKart as “an interesting experiment” and said that they work with different vendors to enable their merchants reach a wider consumer base.
We have created a network of national and local logistics partners who empower sellers to ship to customers across the country in an efficient and effective manner. eKart will join the network along with Delhivery, GoJavas, Blue Dart and many more,
said Sudhanshu Gupta, vice-president at PayTm.
While Sharma terms this “experiment” an “interesting” one, this could be, in the faintest of ways, Alibaba’s internal strategy to test Flipkart, before it plans a rumoured investment into the company — virtually giving it a stronghold on the entire Indian market.
On the other hand, for eKart this means further expansion as an independent business. It is noteworthy that previously eKart used to only aid Flipkart in the delivery of its products. However, after Binny Bansal took over as CEO, eKart has been trying to establish itself as an independent business by openings its logistics services to third party merchants.
Moreover, Flipkart has already invested and plan to invest a lot more into building a strong logistics infrastructure so it does make sense for eKart also to open its services to other merchants.
eKart has already begun to give its services to the online fashion retailer Jabong and is also reportedly in talks with another e-commerce company Shopclues. It is expecting an equal volume of business from Flipkart and the third party merchants by next year.
Ekart has the capability to transport over 5 lakh shipments from different sellers across India. We will be using the same capabilities to offer services to other companies,
said Amitesh Jha, a vice-president at Ekart.
There were also reports of priority clashes between the commerce unit and logistics unit of Flipkart due to the latter’s focus on offering services for the third party merchants. Flipkart then appointed Saikiran Krishnamurthy to improve coordination between commerce and logistics business.