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Best Supply Chain Finance Solution Highly Commended: Flipkart Group

Published: Feb 2022

Best Supply Chain Finance Solution Highly Commended: Flipkart Group

Photo of Vipin Garg, Head of Treasury.

Vipin Garg

The Flipkart Group is one of India’s leading digital commerce entities and includes group companies Flipkart, Myntra, Flipkart Wholesale and Cleartrip. The Group is also a majority shareholder in PhonePe, one of the leading Payments Apps in India.

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Fully automated SCF programme helps Flipkart grow its business during challenging times

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The challenge

Flipkart is a leading player in India’s fast growing ecommerce industry. Due to the competitive nature of the industry, suppliers to online marketplaces typically operate on a very thin margin and face strains on their working capital.

This was aggravated during the pandemic situation due to pent up demand and overall market liquidity challenges. In this situation, Flipkart wanted to leverage its own strong credit standing to inject liquidity into the overall ecosystem during the challenging pandemic times to ensure sustained business growth.

Considering the fragmented supplier base and the scale of operations, Flipkart required a fully automated supply chain finance programme with ease of on-boarding suppliers and handling volumes at pace.

The implementation was required to be achieved under demanding timelines and in a remote working environment.

The solution

Against this backdrop, the company’s bank, HSBC, structured a bespoke supply chain finance programme, with end-to-end (E2E) automation, host-to-host (H2H) connectivity with reverse feed facilitating easy reconciliations and adjustment of credit notes through retention amounts.

The solution can be scaled up quickly with ease of supplier addition with best in class supplier on-boarding and extended uploading cut-offs for seamless handling of volumes.

The full-scale service proposition with dedicated service manager and on-call implementation support demonstrates operational excellence. This holistic solution leverages HSBC’s corporate network to help facilitate suppliers to on-board the programme.

It was implemented in a remote working environment with all documentation enabled during the pandemic and supported at peak levels through distribution to group offices delivering a seamless client experience with single bank interface.

Best practice and innovation

Automation – the full automation with the reverse feed to suppliers on the central vendor management system of the anchor, makes it easy for suppliers to track the status and reference of payments under the programme. This helped the programme gain supplier confidence quickly and thereby overall adoption.

Time to implementation – the overall implementation was achieved by a cohesive working group across client treasury, business teams and HSBC ensuring the addition of approximately 300 suppliers in just 1.5 months post launch.

Supplier experience – the programme straddles multiple business categories and is offered to vendors of all sizes. Smooth on-boarding experiences were ensured for suppliers through minimal documentation achieved automatically. Dedicated on-boarding helped address the supplier queries about the programme effectively.

Key benefits

  • Streamlined working capital for suppliers.

  • Suppliers benefiting from credit strength of Flipkart.

  • Working capital optimised.

  • Sustainable, scalable and secure solution.

  • Effective on-boarding of suppliers.

“Suppliers are an integral part of our business and supporting them helps create a holistic ecosystem for growth. The supply chain journey with HSBC helped ensure the programme once launched, is sustainable, scalable and secure. Programme scalability gets further enhanced when coupled with a risk participation approach to support volume and is assuring. The thrust before the Big Billion Days, during challenging conditions of the pandemic, is well appreciated by our business and supplier fraternity. This is important for the industry, and it is for leaders like us to ensure there is liquidity entrusted into the ecosystem for suppliers to grow,” says Vipin Garg, Head of Treasury.

Portrait of Rakesh Patwari, India Country Head of Sales – Global Trade and Receivables Finance, HSBC

Rakesh Patwari

India Country Head of Sales – Global Trade and Receivables Finance
HSBC

We are proud of our association with Flipkart Walmart and our ability to jointly support Flipkart’s vendor partners. The last couple of years have been challenging for supply chains globally with multiple disruptions. This has led to accelerated tech adoption across the value chain. Supply chain finance is a key focus area for us and we continue to invest our energies to develop new tech-enabled solutions to make ecosystems more resilient.

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The Adam Smith Awards Asia is the industry benchmark for best practice and innovation in corporate treasury. The 2021 awards attracted a record-breaking 497 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia

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