New Delhi: E-commerce-focused logistics firm Ecom Express has started fulfilment services with the opening of three new warehouse facilities in Gurgaon, Bengaluru and Lucknow.
The fully automated Gurgaon facility, its largest, covers 500,000 sq. ft, while the other two are around 40,000 sq. ft each.
As a new line of business, the company will offer inventory management, order processing, packaging and dispatch services from these facilities.
“The reason for opening fulfilment centres is that we want to give complete solutions to e-commerce customers," said Sanjeev Saxena, co-founder and director of Ecom Express. The company until now only handled last-mile deliveries.
Saxena said his company plans to open at least seven big and 20 small warehouses. Each big facility will entail a cost of Rs40 crore. Two large warehouses of around 200,000 sq. ft — one 100-150 km from Mumbai and the other about the same distance from Bengaluru — will come up this year.
“The objective is to reach any place in India by road in two days," he said.
Ecom Express delivers to 11,000 pin codes across the country. It operates about 1,200 delivery centres (800-1,500 sq. ft each) and 33 transit hubs (5,000-30,000 sq. ft each).
Barring giants like Flipkart and Amazon that operate their own fulfilment centres, e-commerce companies outsource a large part of their storage and order management to third-party logistics companies like Delhivery, Blue Dart, Gati and DTDC.
Delhivery, Ecom Express’s biggest competitor, operates 11 fulfilment centres across the country.
Opening a fulfilment centre is a logical extension to the delivery business, Saxena said, as it allows clients to store their products, and manage inventory and dispatch, without having to own the infrastructure.
Not only does it reduce costs for the e-tailer, delivery processing is faster as consignments rest with the vendor who carries out the delivery. Fulfilment centres also serve as zonal hubs for delivery companies to manage their own consignments.
For billing, Ecom Express will charge clients for storing goods, managing their orders through its software and packaging. The consignments can then be delivered by Ecom Express or another third-party vendor.
Saxena also said that with the roll out of the goods and services tax (GST), consumer goods companies will be looking for larger warehouses.
“With GST, a lot of warehouse consolidation will happen and players will need big facilities. These facilities are available with us." he said, adding that the company will focus on clients in auto spare parts, fashion retail (Jabong and Myntra) and large online sellers for its warehouse offerings.
Ecom Express and Delhivery, besides Flipkart-owned Ekart, are among the largest delivery firms in India focused on e-commerce. In June 2015, Ecom Express raised Rs850 crore from private equity firm Warburg Pincus, a month after Tiger Global Management infused Rs542 crore in rival Delhivery.