Flipkart supply chain goes for a toss as volume peaked during Big Billion Days

Early festive sales brought stellar business to e-commerce majors Amazon and Flipkart. Both claimed to have scored lead over another in terms of gross sales and market share. Consumers also relished at the annual discount extravaganza and placed as many orders as they can.

While Flipkart claimed to corner 73% market share during the Big Billion Days, its supply-chain seems to have crashed in fulfiling orders. Many sellers have been complaining about delay up to two weeks in dispatching confirmed orders.

“I have received 474 orders between September 30 and October 4. However, not a single order has been dispatched yet,” said one of the sellers who participated in BB Days.

According to an update sent by Flipkart to many sellers, due to the high demand for products listed from the area, their logistics partner is nearing its maximum capacity. Hence, they might have to restrict the order flow.

Meanwhile, Flipkart confirmed that there would be pickups for the orders that sellers have already received. It’s worth noting that this isn’t the first time Flipkart has been facing fulfilment issue during the festive sale.

The supply chain had proved incapable in fulfilment almost every year since 2014 when it started the Big Billion Day sale. Entrackr has spoken to over a dozen sellers across many locations about the dispatch and other supply chain issues.

Sellers have been sitting on huge sold-out inventory because of delay in dispatch. Three sellers, on condition of anonymity, explained, owing to this, a significant portion of the confirmed orders is likely to be cancelled as well.

Since dispatches are happening after two or three weeks of the order confirmation, sellers also lament about blockage of the working capital.

“I received over 2,000 orders for six days sale but didn’t get payments. As a result, dealers and other vendors have been after me for their due payments. I don’t know what to say to them,” said another seller.

Apart from general sellers, Gold accredited sellers on Flipkart have also been facing delay in dispatch issue.

"My company is amongst one of the top 5% Gold sellers on Flipkart. Still, our products have not been shown on the website. We didn’t get a single order from Flipkart in the last two days. Who will bear the losses and inventory cost?" questioned a Gold accredited seller.

According to seller's representing body AIOVA, there is no justified logic to this. “Flipkart should unbundle their service and allow sellers to use their own methods to service consumers. Flipkart should figure out whether they are running a marketplace or a logistic company,” it said.

Responding to Entrackr detailed questionnaire, Flipkart’s spokesperson said in a statement:

“In preparation for the phenomenal demand we were likely to see, we had supplemented our pan-India supply chain network with added capacity and created additional employment opportunities for 50,000 people this festive season. Within the first 12 hours of the full sale opening, Flipkart had already dispatched 1 million orders from our fulfilment centres. With TBBD’19 wrapping up just before the weekend, we expect a rapid pickup in seller shipments starting Monday.”

While sellers undoubtedly have been facing several issues due to delay in dispatch of orders, inability to do fulfilment on time is a reality check for the entire e-commerce ecosystem, and not only Flipkart.

Billion dollars have been flowing into the e-commerce sector every year. However, only a small portion of it gets invested in supply chain and logistics.

For context, there are only a handful of companies, including Delhivery, Ecom Express, XpressBee, GoJavas and Shadowfax who have emerged in dedicated supply chain solutions for e-commerce.

If we include traditional companies in logistics and warehousing, there are not more than 20 companies who in some way or another power e-commerce sector in India. To support the fledgeling e-commerce ecosystem in India, the industry requires more logistics and warehousing operators.

*We have updated the post with Flipkart statement.