Beware! Flipkart’s Ekart is making a disruptive entry into courier service segment

Flipkart’s logistics unit, Ekart, is storming into courier services now and this is likely to disrupt the segment where players such as DTDC Express, First Flight Courier, etc are already big names.

Ekart Courier will provide door-to-door pick up service in less than four hours and deliver parcels within two days.

Customers who will make the booking will be able to locate the parcels in real time through SMS updates and tracking.

This means, Ekart Courier will impact the present day courier services, ending long queues and worries over delay in deliveries.

Ekart plans to capture 5-10 per cent of the market in the first year and expects revenue of over Rs 200 crore of the Rs 22,000 crore market.

"We expect this service will be as disruptive as Flipkart's entry into the ecommerce space. The industry is still very unorganised. No one provides an end-to-end proposition that consumers want," said Amitesh Jha, vice-president at Ekart, told ET.

The Ekart Courier will debut from Bengaluru next week and in 50 other cities by September. It will give parcels at any of the 3,800 pincodes it directly reaches across the country.

"Courier market is very price-sensitive. Typically, the yield players get in the courier market is Rs 15-25 per delivery. But for etailing-focused logistics players, the cost structure is way too high to address that market because they get around Rs 85 yield per delivery and are still not profitable," Manish Saigal, managing director at consulting firm Alvarez & Marsal, told ET.

However, Jha is not worried about the competition.

(Image: Thinkstock)