E-commerce in India is at a nascent stage and cost structure of logistics is the biggest challenge for the segment, a top official of Flipkart said on Tuesday. Speaking at Walmart Growth Summit, Flipkart CEO Kalyan Krishnamurthy said the government has simplified taxation and adopted ease of doing business as a strategy, which is one of the factors driving growth of the e-commerce segment.
“One of the biggest challenges for e-commerce alone to solve is the cost structure of logistics. India, in general is a low ticket price market. Whenever we are able to get to further (lower logistics) cost structure, is when we will be able to further increase the penetration in commerce,” Krishnamurthy said. The e-commerce company has plans to transition its delivery fleet to electric vehicles by 2030.
Krishnamurthy said the e-commerce penetration in India is around 7-8 per cent compared to retail but in some product categories like electronics, it is high. “Tax simplification used to be one of the biggest challenges. Like I said before, the government has just done a tremendous job in all of these things. Ease of doing business as a concept has been taken by the government as a strategy. Technology enablement has been a big part of ease of doing business as well,” he said.
The company posted 9.4 per cent increase in consolidated net total income at Rs 56,012.8 crore for financial year 2023 from Rs 51,176 crore in FY 2022. Despite this, its loss widened to Rs 4,890.6 crore from Rs 3,371.2 crore.
