This move is expected to establish eKart as an independent business while reducing its dependency on a single customer – Flipkart.
For Paytm meanwhile, the move means deeper penetration into India, reaching customers in small towns and cities. Currently, it is these small towns and cities that make up for more than 50 per cent of Paytm’s total orders. Paytm is expected to start availing of eKart’s services in the next two weeks.
eKart had earlier signed on with online fashion store Jabong to handle its logistics and is also in advanced talks to close a deal with ShopClues. Myntra, which was acquired by Flipkart for $330 million in May 2014, has already been using eKart’s logistics services since September 2015.
Just this month eKart rolled out two new initiatives. In the first, it signed a deal with Apollo Pharmacy for delivery and pickup of products. eKart will deliver ordered goods to an Apollo Pharmacy which is convenient to the buyer. The customer will then get a message asking him to pick up the product along with a four digit pin, which he will show at the time of pick up.
If the product is not claimed within 5 days, Apollo Pharmacy will give it back to eKart. eKart will pay Apollo an undisclosed amount for keeping these shipments.
Over the last three months, eKart has tied up with over 300 Apollo Pharmacy outlets and plans to increase this to 1,000 stores by the end of 2016.
The second initiative is the launch of a Fulfilled by eKart (FBE) initiative. The idea is to tap merchants selling goods on other e-commerce websites, with the aim of improving efficiency and capacity utilisation.
Experts suggest this could be 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. Flipkart has renewed talks with Alibaba recently to raise a fresh round of funding. Rumours are rife that Alibaba is in talks with Flipkart to acquire a stake in the company.
India’s top e-commerce companies including Flipkart, Amazon and Snapdeal have each set up in-house logistics companies, as they compete to deliver shipments quicker to customers. The companies aim to provide warehousing and end-to-end fulfillment services to sellers.