Ecommerce in India is in its early stages, with logistics costs being the most significant problem, news agency PTI reported, quoting a top Flipkart executive on Tuesday.
Speaking at the Walmart development Summit, Flipkart CEO Kalyan Krishnamurthy stated that the government has reduced taxation and implemented ease of doing business as a strategy, which is one of the causes driving ecommerce development.
“One of the biggest challenges for ecommerce 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 ecommerce business intends to shift its delivery fleet to electric cars by 2030.
According to Krishnamurthy, ecommerce penetration in India is roughly 7-8 per cent compared to retail, although it is higher in some product categories such as electronics.
“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 business reported a 9.4 percent growth in consolidated net total income to Rs 56,012.8 crore for fiscal year 2023, up from Rs 51,176 crore in FY 2022. Despite this, the loss increased to Rs 4,890.6 crore from Rs 3,371.2 crore.
