Last mile delivery appears to be the focus of attention of most ecommerce players as they are all busy strengthening their logistics portfolios.
Flipkart has been, undoubtedly, the most aggressive of them with its logistics arm Ekart Logistics, receiving Rs 1,632 crore in funding recently. The amount has been received into Ekart’s books via Instakart Services, a Singapore based firm, which is a part of Klick2Shop Logistics Services International, also part of the Flipkart group only.
The information, taken from the company’s filings with India’s Corporate Affairs Ministry, reveals that this amount has actually been transferred to Ekart in three tranches; the funds were actually received in the month of November 2016 itself. The amounts transferred by the Singapore firm are Rs 323.6 crore, Rs 981.7 crore and Rs 327.4 crore totalling the above figure of Rs 1,632 crore.
The company has mentioned in its filing with the MoCA that "the equity shares allotted to Klick2Shop Logistics Services International shall rank pari-passu with existing equity shares of the company as to dividend voting or otherwise...,".
Ekart does handle Flipkart’s last mile delivery as a major component of its business. One estimate says that about 70% to 80% of Flipkart’s deliveries are done through Ekart. In terms of sheer numbers, Ekart covers 3,800 postal code zones in the country and 10 million shipments are delivered each month.
The expectation is that the funds now received will be used to setup more warehouses as part of decentralisation of the operations and with the implementation of GST, it has become easier to do this.
Flipkart’s major rival, Amazon is already ahead with its Prime service, where it offers its Prime customers next day delivery and the other chaser in the pack, Paytm mall is also investing in the logistics space.