Flipkart unit shuts courier and hyperlocal services

The move was seen as a way to boost earnings from non-core businesses; focus on core business model

Ekart, logistics unit of Flipkart, the country's largest e-commerce marketplace, has shut its customer-facing courier service and hyperlocal delivery project here, less than a year after launching both.

The supply chain business, so far seen as one of the strongest units of Flipkart, has been hit by a wave of consolidation. The change comes soon after Ekart head Saikiran Krishnamurthy quit, with Chief People Officer Nitin Seth taking over the reigns last month.

“Beginning February 5, it (Ekart) no longer operates its customer-to-customer courier service, started in May 2016, that gave people the option of having documents and parcels packed by Ekart’s delivery boys and shipped to end-addresses,” said the company when asked.

Flipkart says it will continue its business to business service that offers warehousing and deliveries to offline sellers such as Madura Garments and online sellers such as Paytm. While not divulging details on why the shutting down decision was taken, Flipkart said it was to sharpen the focus on its core business model. 

Ekart was under the direct oversight of Flipkart co-founder Binny Bansal, prior to him becoming the chief executive officer (CEO) in January 2016. He pushed for the logistics unit to begin servicing third-party deliveries from both offline sellers and rivals such as Paytm and Jabong (bought by Myntra later in 2016).

Similarly, partner Sachin Bansal was overlooking the company’s advertising business -- from sellers and brands to promote their products on Flipkart, by offering prominent positioning on its website and app. The ads business also seems to have been put on the back burner, with no significant upgrades and announcements in recent months.

The move was largely seen as a way to boost earnings from non-core businesses, to offset the losses being made by the main e-commerce unit. However, with Kalyan Krishnamurthy taking over as CEO of Flipkart, pushing the two founders into non-operational roles, the focus seem to be coming back to making e-commerce profitable. 

Krishnamurthy has been taking hard calls to shed bulk at Flipkart, starting with cuts at the top management, seemingly driven by performance. Flipkart has seen several exits in the past year.