Flipkart may invest Rs 5,000 cr in logistics parks, generate 50,000 jobs

Bengaluru: Flipkart is acquiring 300 acres in Karnataka, Gurugram and West Bengal to set up logistics parks as the e-commerce major looks at tapping the next wave of e-commerce opportunity in the country.

According to sources privy to this development, the Walmart-owned firm is likely to invest up to ~5,000 crore to set up these logistics parks, which are expected to generate about 50,000 direct and indirect jobs.

These investments are expected to give an edge to Flipkart, which is locked in a fierce battle with Walmart’s US rival Amazon to dominate the online retail market in India.

“The Flipkart team is sourcing land privately in Bengaluru, and has identified four sites. In West Bengal, construction is expected to start soon,” said a person, adding, “For Gurugram, land has already been identified for the purpose.”

The fully-integrated parks will include Flipkart warehouses, improve supply-chain efficiency, and reduce costs by deploying mechanised warehousing. They will act as freight aggregation and distribution hub, and leverage technology for intelligent transport systems.

The Flipkart logistics parks will be built on the principle of sustainability to curb any wastage of valuable natural resources, sources added.

On being asked, a spokesperson of Flipkart said on Tuesday that the infrastructure it is building across the country through these warehouses and logistics parks would help it in tapping the “next 200 million customers”.

Financial services firm Morgan Stanley estimates the Indian online retail market to touch $200 billion by 2028, from about $30 billion last year.

The company also brushed aside rumours around the possible exit of Flipkart Chief Executive Officer (CEO) Kalyan Krishnamurthy, saying those are “completely baseless and inaccurate”. Flipkart said Walmart President and CEO Doug McMillon, who was in India last week, also exuded strong faith in the leadership of Flipkart group companies.

“I met with Kalyan (Krishnamurthy), Sameer (Nigam), and their leadership teams and was excited to see how the Flipkart, Myntra, and PhonePe teams are driving the industry with innovative solutions to serve its diverse and growing ecosystem,” McMillon said in a statement.

“There is tremendous progress and we are making a difference. Kalyan, Sameer, and their teams have our full support to continue executing the growth strategy for our e-commerce business in India,” McMillon added.

In May last year, Walmart paid a whopping $16 billion to acquire around 77 per cent stake in Flipkart, a transaction that valued the e-commerce firm at over $20 billion.

According to Krishnamurthy, the Flipkart group has received tremendous support from the Walmart leadership. “There are many areas where we are already working together and learning from each other, and I only expect that to keep increasing — which is a great indicator of how the partnership is progressing,” said Krishnamurthy.

He said that it is an exciting time to be in Flipkart group, which is focused on delivering the next wave of e-commerce growth in India, supporting opportunity creation for consumers, small suppliers, infrastructure development, and innovation-backed by technology.

“I am super committed to Flipkart and this partnership with Walmart. This is the coolest job in the country,” said Krishnamurthy.

 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.