Flipkart has been enjoying uncontested market leader status in India’s ecommerce scene until last year when Amazon began investing heavily in India’s rapidly growing ecommerce industry. Ecommerce is largely a delivery business. Timeliness and reliability matter more than anything. Amazon, where often talks and avails high tech approach to deliver products to customer, Flipkart is placing a low-tech approach in work to deliver goods to customers by tying up with 5,000 Dabbawallas of Mumbai.
In a recent report FT says, “In an unusual experiment in just-in-time logistics, Flipkart, often described as the “Amazon of India” is launching a tie-up with the city’s network of bicycle riding deliverymen, who ferry roughly 130,000 lunch boxes up and down India’s financial capital each day.”
Flipkart, which raised its last funding at a US$11bn valuation, has a strong position in market. While this new move will give the startup an edge over its rival, it also poses risk. Although Dabbawallas has strong reputation in delivering lunch boxes, it is not sure how they will perform in delivering goods from books to toys.
Dabbawallas' has a reputation for timely and reliable delivery. This almost 120 years old delivery system has lauded by management theorists and studied by top business schools. Furthermore, these deliverymen know every area of Mumbai and they are also close to local people. This is a clear win for Flipkart in-terms of timely and reliable delivery. Similarly, this may reduce cost of delivery for Flipkart.
Successful people find value in unusual places, wrote Peter Thiel, this is true for great businesses as well.
However, it will take time to see how Flipkart and Dabbawallas partnership goes and if we can see a new pattern in ecommerce delivery system not in India only but elsewhere of the world as well.
