Flipkart partners Adani Group to build new warehouse

Mumbai

FLIPKART Online Services Pvt has signed a pact with billionaire Gautam Adani's conglomerate to help set up one of India's largest logistics hubs and a data centre, as the Walmart Inc-owned e-commerce firm gears up to battle Amazon.com Inc for a bigger slice of the growing local business.

The tie-up marks the entry of Mr Adani, India's fastest-rising billionaire, into a three-way fight to dominate India's e-commerce market, which is estimated to generate US$200 billion in sales by 2026, turbocharged by pandemic restrictions keeping people away from stores.

Up against the Walmart-Flipkart-Adani alliance is not just Amazon, but also Reliance Industries Ltd, the conglomerate owned by Mukesh Ambani, whose wealth tops Mr Adani's.

Adani Logistics Ltd, a unit of Adani Ports & Special Economic Zone Ltd, will build a 534,000-square-feet fulfilment centre in its upcoming logistics hub at Mumbai and lease it to Flipkart, according to a joint statement on Monday from the two companies. Expected to be operational in the third quarter of 2022, this warehouse - roughly the size of 11 football fields - can store 10 million units of inventory, it said.

The Bengaluru-based Flipkart will also develop its third data centre at the AdaniConnecX facility in Chennai to help the e-commerce giant keep its data within India, according to the statement. Adaniconnex Private Ltd is a joint venture between US's EdgeConneX Inc and Adani Enterprises Limited, the conglomerate's flagship listed unit.

Financial terms of this partnership were not disclosed.

The new fulfilment centre being planned is likely to be larger in area than the ones operated by Amazon in India so far, underscoring the potential size of the Indian market.

"We see this as a great opportunity to serve Flipkart's physical as well as digital infrastructure needs," Karan Adani, chief executive officer of Adani Ports, said in the statement.

The partnership is another sign of Mr Adani's rising clout: his coal mining-to-data centres conglomerate has rapidly expanded and diversified across sectors, adding US$24 billion to his net worth this year.

Riding a massive rally in his companies' shares, Mr Adani's wealth has jumped to almost US$58 billion - the fastest rise in wealth globally. BLOOMBERG