E-commerce in India is in its infancy and the logistics cost structure is the biggest challenge for the sector, a Flipkart executive said on Tuesday.
Speaking at the Walmart Growth Summit, Flipkart CEO Kalyan Krishnamurthy said the government has simplified taxation and adopted ease of doing business as a strategy, which will drive growth in the e-commerce sector. He said this is one of the promoting factors.
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“One of the biggest challenges to solve with e-commerce alone is the logistics cost structure. India is a market with generally low ticket prices. Whenever we can achieve an additional (logistics) cost structure, we 'We will be able to further increase commercial penetration,''' Krishnamurthy said.
The e-commerce company plans to transition its delivery fleet to electric vehicles by 2030.
Krishnamurthy said e-commerce penetration in India is about 7-8% compared to retail stores, but penetration is higher in some product categories such as electronics.
“Ease of doing business as a concept has been adopted as a strategy by the government.As I said before, the government has done a great job in all of this. “Enabling technology also contributes significantly to the ease of doing business,” he said.
The company posted a 9.4% increase in consolidated net profit for FY2023 to Rs 56,012.8 million from Rs 51,176 million in FY22. Nevertheless, the loss widened to Rs 4,890.6 million from Rs 3,371.2 billion.
