E-commerce giant Flipkart has entered into a strategic and commercial partnership with the Adani Group to strengthen its supply chain structure. Flipkart’s customers are growing rapidly and this tie-up will help it increase its ability to serve its customers.
As part of the partnership, Adani’s logistics unit will build a 5.34 lakh sq ft Fulfillment Center (warehouse) at its proposed logistics center in Mumbai and lease it to Flipkart. This will help the e-commerce company to meet the growing demand in Western India.
This warehouse with state-of-the-art technology is expected to start in the third quarter of 2020. At any time, 1 crore pieces of goods of the vendors can be kept at any time. To help MSMEs and vendors strengthen Flipkart’s supply chain, the center will also generate employment at the local level. This can provide direct employment to 2,500 people and indirect employment to thousands. Flipkart is also developing a third data center at Adani Connects, Adani’s Chennai center, as part of its plan to adopt private cloud in the country.
Adani plans to invest heavily in the data center and logistics business. This partnership with Flipkart will help bring in legendary clients for both businesses. The group is also attracting investment from global investors such as Warburg Pincus. Warwarg Pincus recently bought a stake in Adani’s port business. As part of this partnership, the Adani Group hopes to attract even more global customers to its logistics and data center business. Karan Adani, CEO, Adani Ports and Special Economic Zone (APSEZ) said, “We are delighted to see two of India’s fast-growing businesses join hands to develop a very important and state-of-the-art infrastructure. The country needs such infrastructure. It is associated with self-reliant India. ‘
Kalyan Krishnamurthy, Chief Executive Officer of Flipkart Group, said, “We are focusing on providing our customers a wide range of products from vendors across the country and are constantly adopting new ways to keep them affordable. This investment will help us increase our capacity to help MSMEs and also create employment opportunities. ‘With this partnership, Flipkart will have a total of 60 warehouses across the country. However, Flipkart refused to divulge information about its other warehouses. The Adani Group also did not provide much details about the deal.
Forrester analyst Sanjeev Kumar said, “Due to the epidemic, e-commerce companies have faced difficulties in supplying products due to the logistics problem. Demand for e-commerce is also increasing in small cities, in view of which Flipkart has formed this partnership. For example, Flipkart had a relatively small presence in the grocery business prior to the event, but the company is expanding rapidly in this category. Demand for smartphones and home appliances is also increasing in small and medium cities and to meet these demands, the company needs large warehouses. ”
Apart from partnering with the Adani Group, Flipkart is building an integrated logistics center on the outskirts of Kolkata at a cost of Rs 600–1,000 crore. This center will be ready this year.