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Flipkart pumps Rs 666 crore into Ekart
02
Feb '16
E-commerce major Flipkart has infused Rs 666 crore into its logistics business Ekart through a Singapore-based group firm on January 21.

This is Flipkart's second fund infusion in seven months into the logistics business that's housed under a newly created entity called Instakart Services after it bought back Ekart from WS Retail, The Economic Times has reported.

Klick2Shop Logistics Services International previously invested Rs 127 crore in Instakart Services in July.

The latest fund infusion comes at a time when Flipkart is looking to maintain its lead in the etailing market, which is estimated to expand to $36 billion (about Rs 2.45 lakh crore) in 2016-17 from $11billion in 2014-15, according to Goldman Sachs, as it competes with Amazon's logistics prowess.

Ekart had expanded its total warehouse space to 1.6 million sq ft at the end of 2015 across 17 delivery or fulfilment centres.

One of Flipkart's rivals, Snapdeal had infused Rs 250 crore into GoJavas in two rounds of funding.

Flipkart, through Instakart, is likely to ramp up investments further in logistics. It has taken enabling approval of its board to increase the share capital of Instakart from Rs 130 crore to Rs 4,000 crore, creating room for more infusion.

Flipkart is also preparing to build out Ekart into an independent business catering to other companies as well, and has started talks with investors to raise capital separately for the logistics unit at a valuation yet to be determined, according to another newspaper report.

Logistics and supply chain has become a key focus for all e-commerce companies as sound infrastructure helps in reducing delivery cost and ensure faster delivery, which in turn helps e-commerce firms win over customers. (SH)

Fibre2Fashion News Desk – India

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