Flipkart has significantly expanded its infrastructure and delivery operations ahead of the festive sale, an investment that the Walmart-backed company believes will help further strengthen its capabilities in the long-term.
According to a PTI report: Flipkart, which will host its Big Billion Days (BBD) sale from October 10-14 this year, has doubled its warehousing capacity and now has over 65 fulfilment centres and more than 60 ‘mother hubs’ that will cater to the expected spike in demand during the festive sale.
“BBD pushes us to innovate in every area, including supply and logistics. It helps us build capabilities for long-term. Each BBD is bigger than the previous one and sets a new normal — for both business and innovation — for the future,” Krishna Raghavan, Senior Vice President of Engineering (Supply Chain), Flipkart told PTI.
“We have been working multiple months in advance and have doubled our storage capacity this year. This not only helps in speedier delivery to customers but also enables sellers to stock and better plan their inventory in advance,” he further told PTI but declined to comment on investment details. Raghavan added that the cumulative capacity now stands at about 9.5 million sq ft.
The company has also expanded its network of delivery hubs from 600 to over 900 this year to enable 1.8X delivery capability per day compared to a normal day. Besides, about 30,000 new delivery staff have been added over the past many weeks, including freelance workers who are part timers. These personnel were inducted after a proper background screening and given training for 1-4 weeks.
“While the hiring number does see a ramp-up ahead of BBD, it is also important to note that we have been expanding ‘Fquick’ or the freelance network, which now has affiliates from 40 cities…This provides us capacity flexibility at our last mile delivery hubs, leading to spillage reduction and cost efficiency — not only during sale period but beyond that as well,” he was quoted by PTI as saying.
He also cited an example of geo-coding of addresses using machine learning, artificial intelligence and data science to ensure faster and effective delivery even in remote parts of the country. Raghavan said the focus of all these initiatives is to ensure fast and efficient delivery across categories, be it large appliances or grocery.
The network has also been strengthen to support Flipkart’s product exchange programme that has been expanded aggressively, especially in tier II cities and beyond. About 20 million people are expected to shop on various e-commerce platforms during the festive sale next month, translating into sales of around US$ 3 billion for players like Amazon and Flipkart, according to a report by research firm RedSeer. Flipkart’s rival Amazon India will kick off its festive sale from October 10-15.
The RedSeer report states that the share of items like electronics and furniture during the sale could be higher this year due to various affordability initiatives being undertaken by the e-commerce players. Mobile phones currently account for a lion’s share of sales on the two leading e-commerce platforms. Like in offline retail, e-commerce companies see a significant jump in sales during Dussehra and Diwali.
The September-November period typically generates a majority of the annual sales of these companies, which prepare months in advance for the sale event. The festive sale not only brings in discounts and deals for customers but is also an annual showdown of sorts between the two largest players — Flipkart and Amazon India.
The competition between Flipkart and US-based Amazon this year is expected to be even fiercer as both companies have invested significantly through the year to ramp up product offerings as well as logistics infrastructure to ensure speedier delivery. While Flipkart now has the backing of US retail giant Walmart (via a US$ 16 billion deal signed earlier this year), Amazon India too has received funding through the year from the US parent across operations like marketplace and payments.