Ekart's Booming Logistics Business: A Deep Dive
Profiling Ekart's Success
Ekart, the operational arm of Flipkart, has achieved profitability and is now generating cash. According to the Chief Business Officer's declaration.
Ekart, Flipkart's logistics arm, has been on a rollercoaster ride over the past four years. This powerhouse has seen a tenfold increase in revenue and a staggering 50x jump in its customer base, making it both profitable and cash-generating[1]. The big kahuna, Mani Bhushan, their Chief Business Officer, shared this info with the Financial Express. However, additional financial details remain under wraps.
A Cutthroat Logistics Landscape
In the rapidly expanding e-commerce scene, players like Amazon, Flipkart, and Meesho are ramping up their in-house logistics capabilities, causing a squeeze on traditional third-party logistics (3PL) providers[1]. The war in the logistics world has triggered consolidation, with delivery jumping on the bandwagon by snatching up smaller rival Ecom Express to carve out a stronger footing in the market.
The Financial Side of Ekart
Last known financials reveal that Ekart experienced a 5% drop in revenue, while net losses ballooned five times for FY24 compared to the previous fiscal[2]. Of note, revenue from operations for Instakart Services, the division powering Ekart Logistics, dipped to ₹12,115 crore in FY24 from ₹12,787 crore in FY23, and net losses surged to ₹1,718 crore instead of the ₹324 crore in the previous year[2].
Expansion andExternal Growth
Since then, Ekart has been concentrating on expanding its logistics and warehousing offerings, even diving into the unorganized sectors.They've made quite the splash, becoming the logistics provider for one of the largest school chains in the country[2]. Aside from existing clients like Flipkart and Myntra, Ekart now boasts a client roster of nearly 1,000 brands, with external business ballooning sixfold in volume over the last three years[2]. According to Bhushan, many brands found Flipkart's supply chain superior to their own, driving Ekart to venture out to impress more potential clients[2].
The Future of Ekart
In the face of relentless pricing pressure, Ekart expects to double its revenue year-on-year for the next 3-4 years, but with a focus on profit-driven growth[1].
Integrating with ONDC Network
To boost its pan-India presence and bring efficiency to MSMEs, Ekart recently tied up with the Open Network for Digital Commerce (ONDC)[3]. This collaboration is set to fuel Ekart's growth prospects by offering nation-wide reach and logistics expertise to businesses across the nation.
[1] - Ayanti Bera, Financial Express[2] - Sindhu Kashyap, Financial Express[3] - Business Standard Staff, Business Standard
- The booming logistics business of Ekart, a division powered by Instakart Services, has extended its services to various sectors, including the unorganized market, making them the logistics provider for one of the largest school chains in the country.
- In the rapidly expanding e-commerce landscape, financial technology (fintech) innovations, such as decentralized finance (defi), may pose new opportunities for Ekart to diversify and strengthen its finance capabilities, providing it with a competitive edge in the business technology market.
- Despite facing increased competition from e-commerce giants like Amazon and Meesho, Ekart aims to maintain its strong market presence by focusing on profit-driven growth, integrating with networks like the Open Network for Digital Commerce (ONDC) to improve efficiency and expand its pan-India reach.
