Snapdeal gives $20M booster to logistics partner to win last mile race against Flipkart’s Instakart

The ecommerce race in India may well be won or lost in the last mile. Logistics is complex in a vast, diverse country with poor infrastructure. Getting it right means the difference between a satisfied customer and a disgruntled one.

The two local leaders, Flipkart and Snapdeal, have approached the problem from different ends, but they seem to be converging.

Flipkart had its own logistics arm, which it spun out into a separate entity called eKart so that it could scale up and reduce costs by offering the service to other businesses. But in a reversal last month, it brought back the logistics arm as a new entity called Instakart in the parent body. At the same time, it is increasing its use of third parties for handling deliveries and payments.

Snapdeal, on the other hand, has been a believer in partnerships to scale up support systems. One of these was with logistics startup Gojavas in which it invested earlier this year. Today, Snapdeal announced a second round of investment of US$20 million in the company. This move obviously deepens the partnership so that GoJavas focuses on Snapdeal’s burgeoning requirements.

Snapdeal co-founder Rohit Bansal underlines the importance of the partnership:

Gojavas is one of our best performing last mile logistics partners. The company’s average timeline for delivering Snapdeal orders has reduced by a full 24 hours in the last 6 months. With the freshly infused funds, our aim is to help Gojavas expand its reach.

Delivering innovations

Gojavas has expanded rapidly since tying up with Snapdeal in March. Its reach has grown to 350 cities, compared to 150 cities six months ago.

The two companies have also been collaborating on solutions to the delivery puzzles in India. As Gojavas COO Vijay Ghadge elaborates, “We were able to speed up our innovation pipeline because of assured support for new products like 90-minute reverse pickup [for returns] as well as open box delivery for electronic products.”

Instant cash refunds, card-on-delivery, and live tracking of shipments on Google maps are among the other value-adds that Gojavas has brought to Snapdeal deliveries. It will also be a key enabler of Snapdeal’s O2O (online-to-offline) move this month to let customers pick up or try out at local stores the clothes or phones they want to buy from Snapdeal.

See: The Alibaba effect: Snapdeal blends offline and online shopping