Flipkart investing in warehousing to become profitable, after building its largest warehouse in Telangana

It was announced last month and now the dream is finally a reality as Flipkart opened its largest warehouse in Telangana. The newly formed state which is near Hyderabad, gives Flipkart the opportunity to serve the entire South of India and the state is also believed to be tax friendly.

It can be recalled Amazon also opened its largest warehouse in Telangana this year. The online marketplace also took the opportunity to disclose its ambitious plans to expand its warehouse capacity further across the country in order to speed up its delivery service.

• Flipkart now has 17 warehouses

• The new fulfilment centre is spread over 2.2 lakh sq ft

• Holds storage capacity of 5.89 lakh cubic ft

• Has capacity to process 120,000 units a day

• Expected to generate 17,000 direct and indirect jobs within the area

"We are excited to open our largest fulfilment centre in Telangana, which offers a conducive environment for e-commerce companies, which have largely supported the installation of this facility," said Binny Bansal, COO and Co-founder, Flipkart.

Further expansion

The online marketplace has already invested $100 million in warehousing and will now invest a further $500 million over the next four to five years. Flipkart is rapidly working towards being able to deliver to every pin-code in the country by setting up warehouses in each and every state.

• Plans to set up around 80 to 100 fulfilment centres

• Over half of the warehouses will come up in tier-2 and tier-3 towns

“Logistics network is the biggest differentiator. A logistics network presents strong competitive advantages, which is why it will be the biggest investment area for the company," said Bansal.

How do they compare?

What is interesting to note is that at the moment Flipkart which is committed to becoming profitable within three years has just 17 warehouses in the country, while Amazon has 21 and Snapdeal has a massive 63.

Flipkart who is reportedly planning an IPO, also recently explained that Uttar Pradesh is its fastest growing market in North India with over 30 Lakh customers. With the announcement of the massive investment in warehousing over the next few years, Flipkart will be aiming to hang on to its number one position for quite some time.