Flipkart plans to spend $2.5 bn on expansion in 6 yrs

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Hyderabad | Published: October 31, 2015 12:22:03 AM

E-commerce major Flipkart is planning to invest over $2.5 billion in the next five to six years for setting up a wider logistics network...

E-commerce major Flipkart is planning to invest over $2.5 billion in the next five to six years for setting up a wider logistics network, expanding existing business and building over 100 fulfillment centres across the country. The Bengaluru based firm is also planning to tap the capital market in the next two to five years to fund further expansion.

Inaugurating its largest fulfillment centre in Telangana, Binny Bansal, COO and co-founder, Flipkart, said that the company is investing in fortifying its logistical abilities using advanced technologies. “We will be expanding our logistics network which require over a couple of billion dollars. To facilitate this, we have to raise capital and so we may go for an IPO in the next five years after we become profitable in the next two to three years,” he said.

“In the process, we hope to invest more than $500 million to build over 80-100 fulfillment centres across the country in the next four to five years and are in talks with the state governments for the same,” he said.

When asked about the reason for setting up its largest centre in Telangana, Bansal said, “Telangana is strategically located. Moreover, there is an ease of doing business with the Telangana government and there is clarity on the tax issues with no double taxation,” he hinted.

Incidentally, the southern market contributes to 40% of its overall business.

“The state offers a conducive environment for e-commerce companies, which has largely supported the installation of this high-tech facility. Flipkart is investing in fortifying logistical abilities by leveraging capabilities such as automation and many innovative devices. We, along with our partners in the ecosystem are in continuous efforts to firm up our technological back end to deliver the promise of customer delight at every step,” he said.

Out of its 17 fulfillment centres across India, this is its largest one, which is also fully automated. The new center is spread across 220,000 square feet and holds a storage capacity of 589,000 cubic feet. The centre will have automated sorters, with the ability to separate shipments based on pin codes. Weight and volumetric measurement systems are also installed to ensure accuracy and a tight check on quality, while handling the surge in demand volumes.

Bansal further added, “With the addition of this fulfillment centre, we are more confident on offering consumers across the nation, a hassle free and reliable online shopping experience, even offline on the delivery front.” It has over 45 million registered users, with 33,000 employees handling over five lakh orders per day.

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