Logistics is an important aspect of any growing business and that is here to stay for longer than anyone can even expect. But one needs to test new waters, optimize its business to diversify and jump into segments unknown to fuel its expansion. Thus, Flipkart’s logistic arm Ekart is currently testing its hyperlocal delivery model and planning to extend its offerings to third-party users. This development was first reported by ETTech.
For those unaware, hyperlocal delivery model is the one which enables access to local offline stores and services from any location, at any moment of time. These deliveries, which are completed within about an hour, usually involves grocery delivery, home services, daily necessities and even food ordering. Numerous startups have tried to challenge the difficulties and expenses of this model but failed miserably.
Numerous startups, like PepperFry, TinyOwl, etc. have tried to challenge the difficulties and expenses of this model but failed miserably. Flipkart itself has already once failed to crack the model and shut down its grocery delivery business, Nearby, earlier this year. However, it seems confident enough to challenge these difficulties and turn them to their advantage this time around.
Commenting on the optimization of their business, Saikiran Krishnamurthy, recently-appointed head of Ekart, says,
We are constantly investing in improving and expanding our logistics power, from opening new warehouses to reducing average delivery time. We have managed to reduce our per shipment delivery cost by 30 percent.
To start off, it has already partnered with about half a dozen companies to develop expertise in hyperlocal deliveries and further optimize its logistics arm. It has also leveraged technologies it built for the grocery business to pilot its food-delivery business in Bengaluru months later. This model now provides Ekart personnel and freelancers to these partners to deliver food to consumers.
Under the leadership of Flipkart CEO Binny Bansal, Ekart is currently looking to fulfill a few hundred orders on the daily. They, however, plan to ramp up operations, deliveries and reach at least thousand orders per day by March of next year. The aim is to complement attain unit economics in food delivery, which can prove to be far tougher than the e-commerce business(which they haven’t been able to do until date.)
Food is a different ball game. The challenge of point-to-point delivery is you don’t get economy of scale so you have to build a completely different level of technology and intelligence to be able to place your capacity intelligently and use it when needed,
adds Krishnamurthy.
This expansion into the hyperlocal delivery space by Flipkart follows in the footsteps of its arch-enemy Amazon, who has recently ventured into daily care and FMCG segment with its festive sales. Prior to launching this, Flipkart has also launched a consumer-facing courier service ‘Ekart Couriers’ that picks up, packs and delivers items.
These hyperlocal deliveries will not only help Flipkart and Amazon better manage their logistic services but also put them in direct competition with some niche-focused players including the likes of Swiggy and runnr among others.
