Just a month after Kalyan Krishnamurthy took over as Flipkart CEO, major operational changes are becoming visible. Flipkart’s logistics arm Ekart has shut down two of its services which were launched less than a year ago – C2C courier and hyperlocal delivery.
According to a media reports, the move is aimed at consolidating the service offerings of Ekart to sharpen its focus on its core business model. "Beginning February 5, Ekart no longer operates its customer-to-customer courier service started in May 2016, that gave people the option of having documents and parcels packed by Ekart's delivery boys and shipped to end-addresses," the company has told Economic Times.
In May 2016, Ekart harnessed its learning experience with grocery delivery service ‘Nearby’, which shut down in early 2016, to look into food and grocery delivery by piloting in Bengaluru. The move was viewed by experts as one which can change the way e-commerce functions. Ekart Courier provided doorstep pick-up, including package material, for customers inside the city to be delivered across the country – in all the 3,800+ pincodes that Ekart already serves.
In terms of scale, Ekart is believed to be the largest e-commerce-focussed logistics firm. Although achieving economies of scale is extremely hard in logistics industry, Ekart has already achieved that economy of scale in several centres.
Incidentally, following the exit of Saikiran Krishnamurthy who was heading Ekart two weeks ago, COO Nitin Seth has taken over the entity’s operations.
With the launch of third party logistics services in April 2016, Ekart seemed to be becoming an independent entity. They are still catering to the likes of ShopClues and Paytm – with more than 30,000 deliveries per day. Besides fulfilling 85 percent of Flipkart’s orders, Ekart also caters to Myntra by delivering more than 10 percent of its orders. C2C has not grown in a way it should have. That is an opportunity which even third party logistics parties are yet to exploit.