Snapdeal to acquire GoJavas to strengthen supply-chain management

Snapdeal, which has received flak for its sluggish operations in the recent times, is planning to acquire GoJavas in order to strengthen its supply-chain operations. Snapdeal owns a minority stake in GoJavas.

The move is significant since the e-commerce companies have been struggling to match Amazon in its impeccable supply-chain and logistics management. Amazon started its own logistics service—Amazon Transportation Services—in India to be able to control the logistics completely.

While most leading e-commerce firms in India have their own logistics service, Snapdeal opted to tread along a different route. Instead of starting its own service, it acquired a minority stake in logistic startup GoJavas. However, it seems that the minority stake isn’t enough and now, it is looking to acquire the company.

GoJavas was initially formed as a logistics arm of Rocket Internet-backed online fashion retailer Jabong. However, it was spun off as a third-party logistics firm in 2013. While it still is a delivery partner for Jabong, Snapdeal is the biggest delivery partner for the company.

This acquisition will help the company gain back the market share that it has lost to Amazon India and Flipkart over past few months. GoJavas currently delivers to more than 3,200 pin codes, covering over 300 towns and cities. In the coming 12 to 18 months, the company has targeted to be operational in 4,000-4,500 pin codes and expand to 600-800 towns and cities.