The e-commerce market is heating up in India as the country is one of the biggest consumer markets globally, ranked behind America and China. The Indian e-commerce logistics market is flourishing due to an increase in internet penetration, rise in smartphone adoption, favorable demographics, and surge in acceptability of online payment. Further, supportive government initiatives to boost infrastructure development and GST implementation have improved e-commerce across the country. COVID-19 has also fuelled the growth of the e-commerce logistics sector.
E-commerce players are seeking alternative warehousing locations (fulfillment centers) to help the business continuity, along with mitigating delivery delays, which the partnership will help extenuating. In this context, a growing number of companies are opting for a collaborative approach to overcome challenges associated with e-commerce fulfillment and last-mile delivery space. Mumbai being the epicenter of India’s e-commerce, Flipkart and Adani Group’s strategic collaboration is expected to support their corporate growth objectives. The fulfillment center, which will be leased to Flipkart, will serve as the major distribution center to meet the demands arising from the western region of India and international exports.
Repercussions of the collaboration between the two industry giants:
- Increasing the collaboration through localization – It is in line with the idea of self-reliant India built around three fundamentals – local manufacturing, local markets, and local supply chains. The construction of a fulfillment center to support MSMEs and sellers will sequentially develop the manufacturing and supply chain segments.
- Data Protection – The need for data center infrastructure within the country is further necessitated by the data localization in line with the Data Protection Act, for the protection of the digital sovereignty of the country in an increasingly connected world.
- End-users – A wide variety of goods will be offered to the customers at competitive pricing with mitigating delivery delays, thus boosting e-commerce sales.
- Acceleration of digitalization – With the increasing demand for e-commerce, the demand for an effective supply chain and related products and services will also increase, such as Automated Storage and Retrieval System (ASRS), route aggregator, supplier management, etc.
With this partnership with Adani, Flipkart will strengthen its supply chain infrastructure in the country and aims to fend off the stiff competition from other MNCs, partnerships, and collaboration. All eyes will be on the volume of trade that will take place from the newly constructed fulfillment center when it becomes operational in the third quarter of 2022.