HUL Starts Offering Warehouses to Flipkart, Amazon & Other ETailers At Subsidized Rates
Online sellers on Flipkart, Amazon, Snapdeal and Paytm might not always have their warehouses in major cities where customers are. For example, WS Retail, Flipkart’s largest seller, has its major warehouse in Bangalore, while Snapdeal’s biggest warehouse is in Delhi-NCR.
In order to reduce the logistics time and money, Hindustan Unilever Limited, HUL, has come up with a smart program to aid the online sellers. HUL will offer its large warehouse in New Delhi to these sellers at a subsidized rate.
Multiple marketplaces online can get their hands on this facility to initiate quicker deliveries and stock important and huge products safely. Currently, HUL is running the pilot with Paytm and might extend it to other players in the market once it proves successful.
Why would HUL offer its facility to online sellers?
I would like to laud the people at HUL who came up with this solution simply because by offering a warehouse at a lower cost, these e-tailers will have to put forward HUL’s products more prominently over its competitors.
Also, given that these are HUL warehouses, their products will be readily available to eTailers to dispatch on order. Obviously, more and more HUL products will be featured prominently, thereby increasing the sales of their own products.
A source from HUL commented, “This move will accelerate HUL sales on e-commerce portals and sellers will have a larger range of assortments ready to be dispatched.”
This way, HUL will also not have to worry about stocking their entire line of products since it will be available to the sellers all the time at the warehouse.
The Mumbai based consumer goods company offers a variety of products in India in nearly every field – food, personal care and home care products. It is also one of the largest Indian companies and distribution of its products covers around 2 Million retail outlets in India.
Grofers and Peppertap have been successful in providing consumer goods to customers, something Flipkart, Snapdeal, Paytm and Amazon India need catching up to.
What needs to be seen is how other FMCG companies react to this? Will they also extend their helping hand to etailers in bid to increase their online sales, only time will tell!