Future Group, India’s largest retailer, is said to be in talks to buy online retail platform Snapdeal’s logistics arm Vulcan Express for about Rs 50 crore in an all-cash deal.
Vulcan Express, which manages about half of Snapdeal’s deliveries and shipments, replaced gojavas as the primary logistics partner when it was formed about three years ago. The company, currently operational in more than 100 cities, offers logistics and supply chain solutions for retail and consumer companies, which could help Kishore Biyani’s wider strategy of integrating Future Group’s digital and brick-and mortar retail businesses.
A fortnight ago, Biyani-owned Future Supply Chain raised Rs 650 crore by listing on the stock exchanges. The decade-old company caters to clients across consumer, food and beverages, ecommerce and electronics and gets about 63% of its revenue from group entities. At present, Future Group’s technology integration, internally called Retail 3.0, is being piloted by making several Easyday stores a marketplace, giving consumers access to the company’s entire inventory through the digital medium.
While 98% of retailing in India takes place at physical stores, Future Group has been investing in technology, artificial intelligence and creating supporting infrastructure such as last-mile delivery for online sales. With 44 distribution centres covering 4 million square feet of space and 105 branches servicing 11,228 pincodes in the country, Future Supply Chain is already one of India’s largest third-party logistics and supply chain firms.
In comparison, Vulcan Express provides logistics services, including warehousing, transportation, last-mile distribution and reverse logistics as well as quality control and refurbishment of goods, for Snapdeal, smaller retailers and high-value product sellers such as cosmetics firms.