Bengaluru: eKart, the logistics arm of Flipkart Ltd, will soon handle logistics for Alibaba-backed Paytm (One97 Communications Pvt. Ltd), in line with the company’s plans to open up its services to third-party merchants.
The Paytm partnership is the latest one struck by eKart as it seeks to build a large third-party business.
eKart had earlier signed on with online fashion store Jabong to handle its logistics and was in advanced talks to close a deal with ShopClues (Clues Network Pvt. Ltd), Mintreported on 1 February. Besides, the company was also planning to pilot an inter-city customer-to-customer courier service called eFlash.
“We have created a network of national and local logistics partners who empower sellers to ship to customers across the country in an efficient and effective manner. eKart will join the network along with Delhivery, GoJavas, Blue Dart and many more,” said Sudhanshu Gupta, vice-president at Paytm.
Paytm will start availing itself of eKart’s services in the next two weeks, said one person aware of the development who spoke on condition of anonymity.
The two companies have been in talks for the last three weeks, this person added.
Flipkart, Jabong and ShopClues did not respond to emails seeking comment.
Myntra, which was acquired by Flipkart for $330 million in May 2014, has already been using eKart’s logistics services since September 2015.
eKart’s logistics service for third-party etailers compete with well-funded e-commerce-focused logistics firms such as Delhivery (SSN Logistics Pvt. Ltd), Ecom Express Pvt. Ltd and Dotzot, the e-commerce focused arm of DTDC Express Ltd.
Traditional logistics companies such as Gati Ltd, Blue Dart Express Ltd, Safexpress Pvt. Ltd and Drive India Enterprise Solutions Ltd are all adding e-commerce verticals to their existing lines of businesses.
Online retail sales could touch between $48 billion and $60 billion by 2020 from $4.47 billion in 2014, according to an April 2015 report by financial services firm UBS Group AG.
A full-fledged roll-out of the service to other e-commerce companies will require Flipkart to ramp up its infrastructure substantially.
Questions may also arise over eKart’s ability to service other companies at a time when Flipkart’s volumes also surge sharply, say industry experts
Flipkart has named Saikiran Krishnamurthy, a senior leader in its core commerce business, as the head of its logistics unit, Mint reported on 19 March.