Amazon ramps up backend logistics as it prepares for festive sales

Ahead of the onset of festive season sales, Amazon India is ramping up its logistical capabilities to address an expected surge in online buying at a time when the slowdown has hit the economy. To this effect, the company has come up with two large customer fulfilment centres near Mumbai and Kolkata which can handle considerable inventory and increase the delivery speed as well.

As compared to last year, Amazon India has increased its fulfilment centres' total storage capacity by 1.5 times at 26 million cubic feet spread across more than such 50 fulfilment centres as well as increased the tie-ups with kirana stores at 23,000 to boost delivery speeds.

“We have worked backwards on market requirements and we invest in places where we see a lot of customer demand as well as demand from the sellers. Without the fulfilment centres, it will be difficult for the sellers to reach out to a pan-India buyer base”, Akhil Saxena, vice president of customer fulfilment at Amazon India said.

He said that Amazon India has also been strengthening its kirana store delivery model under the 'I have space programme' where an odd base of 23,000 kirana stores across the country can deliver the products to customers within a 2-4 km radius.

“We will do all the heavy lifting for the seller. They can focus on growing their business and will have to pay only for using our services, hence, their variable costs will also come down," he said.

Banking on an extended seller base as well as a wider product range, the online portal is optimist about the festive sales. In the forthcoming festive period, around five lakh sellers, offering 20 crore items will reach out to the customers via the online marketplace as compared to last year’s 3.5 lakh sellers offering 17 crore items.

Asked about the slowdown, Saxena said, “E-commerce still is only three per cent of the total national consumption. A lot of macro economic trends do not necessarily get reflected in the online marketplace and amplify in the manner as it does in the economy”.

Recently, Amazon India has come up with its fifth fulfilment centre in West Bengal which has doubled its storage capacity in the state. The new fulfilment centres in Kolkata has more than 750,000 cubic feet of storage space and will enable faster deliveries of customer orders within the region and neighboring states. With this new fulfilment centre in place, Amazon now has storage capacity of more than 2 million cubic feet in West Bengal.

As part of its expansion of delivery network across the country, in this state, the company has also invested significantly in its sortation centres in this state doubling the capacity to 1,00,000 square feet and increasing the count of delivery stations by 1.5 times to touch 85 such centres. Saxena said it has enabled Amazon to offer 1-day and 2-day delivery in tier 3-4 towns in the state as well.

On the other hand, in Maharashtra too, Amazon India has upped it storage space by 1.5 million cubic feet and now has more than 6.5 million cubic feet capacity spread across 14 fulfilment centres in Maharashtra.