Flipkart to ship third-party goods on its logistics platform

India's largest e-commerce firm Flipkart will offer logistics services to smaller e-commerce firms and retail outlets by March.

Binny Bansal, co-founder, who heads logistics, is driving the initiative for third-party customers. Flipkart, which is investing $2.5 billion (Rs 16,500 crore) to strengthen its logistics infrastructure such as warehouses and delivery fleet, is engaging with online as well as offline firms for the initiative. "Our scale and technology in operations will allow us to open the services to all companies, both large and small," Flipkart said in an e-mail response.

The firm has been actively expanding its logistics network and infrastructure over the past few years. In September, Flipkart had bought back its logistics arm from WS Retail, a unit it had hived off in 2012. It has an in-house logistics arm named eKart.

NEW GROUND

• Flipkart bought back its logistics arm from WS Retail in September
   
• It is investing Rs 16,500 cr to strengthen logistics infra and delivery over the next five years
   
• It has 17 warehouses in India, the largest one in Hyderabad
   
• It recently acquired stakes in MapMyIndia, BlackBuck & QikPod

Flipkart, backed by Tiger Global, Accel and South African internet firm Naspers, has also acquired stakes in companies like digital map maker MapMyIndia and online freight booking start-up BlackBuck. The firm has built a hub and spoke model for its warehouses, 17 of them that cover 1.5 million square feet of storage capacity across the country, the largest one in Hyderabad.

Currently, most e-commerce companies outsource their delivery requirements to third-party logistics providers. Snapdeal had acquired a stake in logistics firm GoJavas. In March, Amazon had set up Amazon Transportation Services to meet its delivery requirements in India.

Analysts say it is a natural transition for e-commerce companies, which make massive investments to build its logistics infrastructure to open its doors for other firms. "It is a logical move. Businesses have ups and downs and when infrastructure gets underutilised, it makes sense to optimise the investments," said Nitin Bawankule, director for e-commerce for India at Google.

"Flipkart is already talking to a few firms and logistics services for the other companies will start from the next quarter," a spokesperson said. Flipkart's move will enable other players to leverage the company's experience in building a robust delivery network over the past five years.