Online marketplace Flipkart will invest a “couple of billion dollars” in the next few years on beefing up its logistics network as part of efforts to strengthen its position in the booming e-commerce industry.
Flipkart, which competes with Snapdeal and Amazon besides other smaller players, on Friday opened its largest warehouse in Telangana.
The e-tailer plans to expand its network of warehouses across the country to speed up delivery of goods to consumers, and will pump in $500 million over the next 4-5 years.
“The $500 million is for warehouses... investments for logistics will be much bigger... it will be more than couple of billion dollars. It is a very long-term investment plan over the next 5-6 years,” Flipkart co-founder and COO Binny Bansal said. “We expect to get in profitable zone in next 2-3 years.”
Asked about the possibility of a public share sale, he said, “I think an IPO will happen probably in next 2-5 years... It depends on a lot of factors.” He however refused to be drawn into giving a timeframe for the share sale.
Driven by increasing internet population and growing preference for online shopping, ecommerce companies have witnessed a huge jump in sales. Following this, companies are investing heavily on infrastructure, including warehouses and last-mile reach to speed up delivery of products and enhancing consumer experience.
Flipkart’s rival Snapdeal is investing $150-200 million (about Rs 940-1,250 crore) in the ongoing fiscal to expand its delivery operations. It had also picked up a minority stake in logistics firm GoJavas.