Flipkart’s logistics company Ekart has launched a courier service called Ekart Courier in a bid to build a direct consumer facing business. Ekart will deliver to over 3800 pin codes and pick-ups will be enabled in eight cities by June 2016.
Ekart will also allow users to drop a pin for both the pick-up and delivery addresses on a map that is provided by FLIP (Flipkart’s mapping platform). The company says that this will reduce pincode-address mismatches, misrouting of couriers and improve reliability. Ekart will also add GPS and RFID technology to enable real time tracking of the parcels.
Earlier in April, Ekart extended its logistics support to Paytm. A spokesperson from Paytm told that Ekart is one of the 50 logistics partner that Paytm has tied up with; it has already tied up with Delhivery, GoJavas, Blue Dart and many other domestic and national logistics providers.
Offline stores to help?
In July 2015, Flipkart announced that 20 offline centres across 10 cities in India, with its logistics partner Ekart, where users could pick up their products. Flipkart said that it ventured into this supply chain because some of its users were unavailable during delivery time; and planned to offer value added services like instant returns, spot trials, open box deliveries and product demos to the centres in the near future.
Weight mix to factor in profitability
The Ecconomic Times points out that courier companies handle about two million shipments a day with networks of thousands of branches. Parcel sizes are typically less than half a kilogram, whereas ecommerce parcels are usually 1-2 kg. The report adds that on parcels less than half a kilogram, companies get a yield of Rs 15-25 per delivery as compared to Rs 85 per delivery in ecommerce focused players.
Indeed, in a recent analyst call logistics company Gati said that it has shifted the weight mix to parcels below 2 kg to maintain profitability. “Actually over the last couple of quarters we also shifted our focus to look at the lower weight categories. Beginning of this year we were doing 60% above 2 kg, 40% less than two kg and now at the end of this year we have kind of change that and doing 60% in less than 2 kg category and 40% in above 2 kg,” Dhruv Agrawal, EVP of Gat-Kintetsu explained.