Amazon India to double storage, hire 5,000

The additional 14 fulfilment centres will bring the total to 41 centres for Amazon in India

Amazon India is doubling its storage capacity with the addition of fourteen new fulfilment centres this year as it looks to cater to a growing base of Prime customers who demand expedited shipping.

The company says the expansion will create an opportunity for the employment of around 5,000 individuals, spread across its 14 new centres. This figure will not include the temporary workforce Amazon hires to fulfill increased order demand during festivals and sales.

"We've continued to expand our network over the past three years. For Prime customers, this growth in fulfilment centres enables them to get deliveries faster. So as the Prime customer base in India grows bigger they will be able to benefit from this," said Akhil Saxena, Vice President for Customer Fulfilment at Amazon India.

Out of the 14 fulfilment centres Amazon is setting up in 2017, seven will be specialised centres for storage and handling of large appliances and furniture that requires different type of expertise. The other seven centres will be opened by mid-June, including three in Andhra Pradesh, Uttar Pradesh and Madhya Pradesh where Amazon was not present before.

While Amazon did not spell out the investments it was making to expand its capacity in India, CEO Jeff Bezos in a recent statement assured that the company would "keep investing in technology and infrastructure" in India. Moreover, Amazon's International Business losses have remained elevated for the past three quarters, pointing at increased spending in India.

The additional 14 fulfilment centres will bring the total up to 41 centres for Amazon in India, with a storage capacity of 13 million cubic feet. It claims this will give it the most amount of storage capacity among all e-commerce companies in India, something which will make it more attractive to sellers who are increasingly utilising Amazon's warehouses to store their stock.

"The sellers benefit with this expansion because they now have more space to bring in their selection. What this allows them to do is have access to all our sellers across the country. For customers, because they now have a centre close to them, the time it takes to get something delivered comes down," added Saxena.

Rival Flipkart says it has 21 warehouses with a capacity of 7.5 million cubic feet, in addition to 10 more warehouses specifically serving orders for large appliances.

Estimates suggest that Amazon might already have as many as five million Prime subscribers, to whom deliveries must be made within a period of two days. Globally, it is seen that Prime customers buy many more products a year, spending almost double the amount of a non Prime customers.

With the company hinging so much of its future growth plans on Prime and building loyalty among a group of Indian shoppers, the company is backing it up with growing essentials such as infrastructure. The entry of Chinese giant Alibaba into India through Paytm also adds a twist, being one of the few e-tailers that could possibly match Amazon's monetary might.