Logistics company GoJavas has shut down its operations citing technical issues, reports Mint. However, a report from the Economic Times points out that operations were suspended as the company is considering an organizational overhaul which will involve layoffs at the company.
GoJavas is planning to shift to a franchisee model wherein it would provide technology to logistics partners that it onboards, the report added. It is also considering a variable salary model based on a packet or kilograms delivered and a fixed salary component.
This move becomes significant as ecommerce company Snapdeal is in talks with GoJavas to acquire it. Snapdeal currently owns 42% in the company after it invested $20 million in October 2015. It had also picked up a minority stake in March 2015 as part of a strategic partnership.
Note that Snapdeal recently opened six new fulfillment centres under its logistics company Vulcan Express. Vulcan, which also operates on a franchisee model, has 69 logistics hubs in the country where it leases out space to third parties and manages them. But as of now, Vulcan owns 10 logistics centres entirely.
GoJavas began as Rocket Internet-backed online fashion store Jabong’s third-party logistics service called JaVAS (Jabong Value Added Services) in December 2012. However, it was later sold to Gurgaon-based QuickDel Logistics in February last year and rebranded to Gojavas. Jabong is currently listed as a client of Gojavas, along with Paytm, HealthKart, Hindustan Unilever, LensKart, YepMe, Juvalia&You, Avon, Forever21 and Provogue.
Conflict of interest related to Jabong
Last month, a report by The Ken alleged conflict of interest in GoJavas and Jabong in technology deals, unusually low pricing rebates in disposal of goods returned by buyers (or believed to be returned by buyers) citing a leaked report. The report also detailed how Jabong founder and former CEO Praveen Sinha made personal gains from business dealings at the fashion website, charges he has denied. Sinha continues to hold significant stake in GoJavas. Jabong was eventually sold to Flipkart in an all cash deal for $70 million.
Ekart’s courier service
In May, Flipkart’s logistics company Ekart launched a courier service called Ekart Courier in a bid to build a direct consumer facing business. Ekart would deliver to over 3800 pin codes and pick-ups will be enabled in eight cities. 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, Blue Dart and many other domestic and national logistics providers.