Snapdeal strengthens logistics arm with 42% majority stake in GoJavas

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It was recently reported that Snapdeal bought a minority stake in egrocery delivery company PepperTap. A few days later rumours were rife that fashion etailer Jabong had approached Snapdeal for a possible buyout. The online marketplace has continued to flash the cash with its latest investment in logistics company GoJavas, to compete with the likes of Flipkart’s logistics arm ‘ekart’.

The story so far

Snapdeal had bought a 20% stake in GoJava’s in March for a reported Rs. 120 crore. It has now become the largest shareholder by investing a further Rs. 117 crore to take its stake up to a mind-boggling 42%, fuelling a possible takeover, although nothing has been confirmed by either party.

GoJavas value chain

GoJavas was founded in 2013 and has vast experience in the logistics field after working with the likes of Jabong, Lenskart, Yepme, Fabfurnish and Healthkart. It is understood that the fresh funding from Snapdeal will assist in improving its value chain in areas such business development and also increasing working capital.

GoJavas offers:

  • 100,000 square feet warehouse space
  • Delivery to 300 cities and towns
  • Service to 2,900-plus postal districts

How will this benefit Snapdeal?

Snapdeal has so far refrained from going over the top in terms of building its own in-house logistics team, instead preferring to outsource to third-party courier companies such as Ecom Express and Blue Dart.

With the competition such as Flipkart, Amazon and Myntra making aggressive inroads into Tier 2 and Tier 3 cities on the back of strong logistical capabilities, such as enhanced ‘Last Minute Delivery’, Snapdeal is also planning for the future. ‘Last Mile Delivery’ is proving to be more than just the latest fad in ecommerce logistics and through the investment in GoJavas it looks like Snapdeal is not too far behind in providing a greater delivery experience to customers.

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3 Comments

  1. In order to strengthen its supply-chain operations, Snapdeal is reportedly planning to acquire GoJavas, in which, it owns a significant amount of minority stake.

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