Flipkart and Adani join hands to boost Indian Supply Chain Operations

E-commerce giant Flipkart has announced a partnership with Adani Group for logistics and data centre businesses. In the partnership, the former will work with Adani to strengthen its supply chain infrastructure. The deal also aims to enhance Flipkart's ability to serve its customers, create jobs and support MSMEs in India.

As per the deal, Adani will lease a new fulfilment centre spread across 5.34 lakh sqft in Mumbai. It will also set up a data centre at AdaniConneX Private Limited to leverage technology expertise from the latter. A statement from the companies states, “As part of this partnership, Adani Logistics Limited will construct a massive 534,000 sq. ft. fulfilment centre in its upcoming logistics hub in Mumbai to lease to Flipkart to address the growing demand for e-commerce in Western India and support market access of several thousands of sellers and MSMEs in the region.”

AdaniConnex, where the data centre will be, is a recently formed joint venture between EdgeConneX and Adani Enterprises. The centre comes into operation by Q3, 2022 and will have the capacity to house 10 million units of sellers’ inventory. Additionally, it will create 2500 jobs and over 1000 indirect local jobs.

What does the deal imply for Flipkart and Adani?

As Flipkart has been keen on expanding its supply chain operation, it considered a partnership with Indian railways too. The company was in conversation with the Indian Railways to lease out land parcels in smaller towns and cities. Still in-process, the increased land for warehousing will greatly benefit the eCommerce giant's aim to reach Tier 3 and 4 areas. With Adani Group in the picture, Flipkart aims to get competitive in the "same-day delivery" market. With an expert tech backend and data localisation, the company is spending a lot on fulfilment centres. Thus, the company may increase its value exponentially.

As for Adani, the partnership means it has an upper hand in competition with Amazon and Reliance Industries. “This broad-ranging partnership across our logistics and data centre businesses is a unique business model. We see this as a great opportunity to serve Flipkart’s physical as well as digital infrastructure need. We look forward to a long and fruitful partnership as we focus on learning from each other as well as leveraging our mutual strengths to prioritise consumers and development of India’s MSME ecosystem,” said Karan Adani, CEO of Adani Ports and Special Economic Zone.