American e-commerce giant Amazon is doubling down in India ahead of its marquee festive season sale which kicks off in the last quarter of the year in the country.
The Seattle-headquartered company on Thursday said it is opening 10 new fulfillment centers and expand the seven existing ones. This will take the total number of fulfillment centers to 60 across 15 states, which will increase the total storage capacity by 20% to over 32 million cubic feet, the company said in a statement.
According to Akhil Saxena, VP, customer fulfillment operations, Amazon India, the increase in storage capacity is in line with the company’s long-term commitment to invest in the country.
The new centers will be set up in cities including Delhi, Mumbai, Bengaluru, Patna, Lucknow, Kolkata, Hyderabad, Chennai, Ludhiana, and Ahmedabad before the festive season starts.
The e-commerce firms in the country including Flipkart and Amazon suffered a massive drop in sales due to the nationwide lockdown in April and May. In the following two months as lockdown rules were relaxed allowing e-commerce companies to deliver products in all categories, the sector saw a V-shaped recovery with sales volumes going back to the pre-COVID-19 level.
Although annualized GMV had nosedived to USD 3.5 billion in April, both the companies are continuing with their annual sale events that will prepare them for their biggest sale activity starting October. While Flipkart’s fashion arm Myntra said it sold 10 million products during its flagship ‘End of Reason’ sale last month, Amazon’s yearly two-day long Prime Day event will start next month.
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Increasing the number of fulfillment centers will help Amazon optimize its delivery capabilities during the festive season sale which usually attracts millions of customers who shop from the platform to enjoy massive discounts.
“Our investment in infrastructure and technology is to provide sellers with closer access to Amazon’s fulfillment offerings, customers with faster delivery on a wider selection of products, and help ancillary businesses such as packaging, transportation, and logistics,” Saxena said.
Amazon said a large number of sellers across India use its ‘Fulfillment by Amazon’ service for faster delivery of products. Typically sellers on Amazon send their products to these fulfillment centers and once an order is placed, Amazon picks, packs, and ships the product to the customer as well as provides customer service and manages returns on sellers’ behalf.
Apart from enabling local merchants sell across the country, the company recently stated that it has helped 60,000 Indian exporters to sell ‘Made in India’ products worth USD 2 billion to global customers in over two years.
The expansion of its fulfillment centers, the company said, would increase job opportunities in the country. Earlier in May, the company had announced that it would create 50,000 new seasonal roles across its fulfillment and delivery network as it anticipated an increase in demand for online shopping going forward.
The development comes at a time when Flipkart is streamlining its operations to focus both on B2C and B2B segments. Earlier this week, the Walmart-owned company acquired its parent’s wholesale arm Walmart India and said it would launch a digital B2B marketplace to service neighborhood stores as well as small businesses.