Home >Companies >News >PhonePe partners with Shadowfax to pilot hyperlocal deliveries in Bengaluru
PhonePe expects merchants to bear the cost of deliveries or even pass it on to customers, for low margin items like groceries.
PhonePe expects merchants to bear the cost of deliveries or even pass it on to customers, for low margin items like groceries.

PhonePe partners with Shadowfax to pilot hyperlocal deliveries in Bengaluru

  • In December, Flipkart had led a $60 million funding round in Shadowfax
  • PhonePe plans to provide this offering subsequently to its merchants across 500 cities in India

BENGALURU : Flipkart-owned PhonePe has partnered with logistics firm Shadowfax to pilot hyperlocal deliveries for its offline kirana merchants in Bengaluru.

The digital payments firm has added a delivery feature on the 'PhonePe for Business' app, through which offline stores can now book for hyperlocal deliveries and deliver essentials to a customer's doorstep.

“Every second offline kirana store continues to face shortage of manpower, as their employees have gone back to their respective villages. We also noticed a trend where kiranas have peak hours of business during the day and are unable to provide home deliveries citing bandwidth issues. Hence, for offline stores listed on PhonePe, we thought of helping them with deliveries to boost their business," said Vivek Lohcheb, vice president, offline business at PhonePe.

In December, Flipkart had led a $60 million funding round in Shadowfax.

PhonePe expects merchants to bear the cost of deliveries or even pass it on to customers, for low margin items like groceries. The company is yet to decide on the average cost per delivery, which will be subject to factors including distance, and is working with delivery partner Shadowfax to explore the same.

“The relationship of merchants and logistics partner will work on a per order basis, where the logistics partner will be quoting a certain price for delivery. Merchant will be paying the logistics company directly, and whether he/she charges customers is subjective. If used cases include a pharmacy, where margins higher, merchants can also choose to absorb the cost of delivery," adds Locheb.

A Shadowfax spokesperson didn’t respond to queries.

PhonePe plans to provide this offering subsequently to its merchants across 500 cities in India, which also happens to match the geographic base of operations for Shadowfax.

PhonePe co-founder Sameer Nigam had earlier told Mint that the company was working with delivery fleets like Swiggy Genie to meet its offline network stores and deliver goods to customers.

However, the discussions didn’t come through, said a person familiar with the matter.

During the covid-led lockdown, PhonePe introduced newer features on its app to help customers discover operational kirana stores, near their vicinity, which were providing home deliveries. Even Google Pay, the payments arm of search giant Google introduced this feature, later, during India’s lockdown.

Several startups over the past two months have adopted a hyperlocal strategy, providing same day deliveries for customers, including Swiggy which launched its essential delivery and task management service, during the lockdown.

In June, Mint reported on Paytm Mall starting a single-city pilot to provide same-day hyperlocal deliveries for groceries, electronics including smartphones and wellness products from local offline store partners. It is in talks with existing partner Delhivery and Gati for this offering.

The Bengaluru-based e-commerce company has also started early-stage discussion with task management service Dunzo, to bolster its hyperlocal delivery operations, individuals aware of the discussion told Mint.

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