Amazon, Flipkart in rapid expansion mode to tap upcoming festive season

Topics Amazon | Flipkart | E-commerce firms

Amazon has launched its largest specialized fulfilment centre, as part of its plans to add 10 new fulfilment centres and expand 7 existing sites, across India
E-commerce giant Amazon and its rival Walmart-owned Flipkart are rapidly expanding their operations in India to tap the upcoming festive season. The Covid-19 pandemic has accelerated the shift to e-commerce, as an increasing number of consumers shop online with greater frequency, throwing huge opportunities for these players.

 
Amazon India has expanded its fulfilment network in Karnataka with the launch of a new specialised fulfilment centre –the largest in India. With the storage capacity of more than 1.2 million cubic feet, the new fulfilment centre is specialised to store and manage customer orders from the large appliances and furniture category. With this infrastructure expansion, Amazon.in will now offer a storage capacity of more than 4 million cubic feet across four fulfilment centres to its close to 35,000 sellers in Karnataka. The company has increased its storage capacity by more than 40 per cent to support these sellers.

 
“We're launching the biggest speciality fulfilment centre in the country. The (facility) is going to have large appliances, furniture,  televisions and all other electronics that people will need for the festive season,” said Abhinav Singh, director, Amazon Transportation Services, Amazon India, in an interview. “We have (created) 100,000 jobs across the country to aid us in building up to the festive season. Now we are making sure it is the biggest for the consumers in terms of the access to selection, best prices and the fastest deliveries,” he said.

 
Singh said that Amazon is encouraged by the emergence of e-commerce as a safe channel for shopping. He said the company is helping thousands of small and medium businesses to get back on their feet by enabling them to do business safely online and reach out to millions of customers across the world.

 
“Right from the beginning of the Coronavirus (Covid-19) pandemic, we have made hundreds of changes in our operational processes to make sure safety is a cornerstone of our expansion,” said Singh.

 
Amazon is also wooing the government to provide its support for scaling up its expansion plans. “E-commerce companies like Amazon have complemented government’s efforts in not only meeting the needs of customers by safely delivering essentials, but also MSMEs (micro, small and medium enterprises) which moved online to grow and expand their businesses during the Covid-19 pandemic,” said Karnataka Chief Minister B S Yediyurappa, who unveiled the facility virtually. “The fresh investment by Amazon in India will create more job opportunities for local youth,” he said.

 
The expansion in Karnataka is a part of Amazon's plans to add 10 new fulfilment centres and expand 7 existing sites, across India. “We are happy to expand our existing infrastructure to support small businesses and have a significant multiplier impact on the local economy,” said Akhil Saxena, vice president, customer fulfilment operations, APAC, MENA and LATAM. “This festive season our priority is to ensure the health and safety of our associates, partners and customers,” he added.

 
Amazon is hosting the ‘Great Indian Festival’ (GIF), which will commence from October 17.

 
India's retail sector is steadily recovering post 'unlock' to reach over 80 per cent of pre-Covid levels which is about $780 billion in 2020, while India e-commerce is booming and is expected to grow at 40 per cent with a GMV (gross merchandise value) of $38 billion this year, according to research firm RedSeer Consulting.

 
“In the midst of this Covid-19 disruption, there are multiple indicators that point to the fact that we have entered a sustained growth phase for Indian e-commerce,” said Mrigank Gutgutia, director at RedSeer. “The best is yet to come, as e-commerce rises to solve the structural challenges faced by India's retail- which still has inefficiencies vs other markets,” he said.

 
Ahead of the festive season, Amazon’s rival Flipkart has significantly expanded its supply chain across the country. The firm has increased its last-mile reach with more than 3,000 facilities across the country.

 
Overall,  Flipkart has added over 3.4 million square feet space across its supply chain assets including fulfilment centres, mother hubs and delivery centres throughout the country.

 
These large fulfilment centres, spanning across an area of up to 500,000 square feet each, are crucial to ensuring a seamless movement of goods between sellers and buyers. The total warehousing space for Flipkart now totals to over 18 million square feet in addition to hundreds of thousands of square feet of assetsfrom partner brands. This has been further strengthened with the onboarding of over 50,000 kiranas across the country.

 
Flipkart is conducting ‘The Big Billion Days' (BBD) sale which will start from October 16. This year,Flipkart said that its BBD event has created over 70,000 direct and hundreds of thousands of indirect seasonal jobs.

 
Key highlights:
  • Amazon Launches its largest specialized fulfilment centre in India
  • The centre is specialised to manage large appliances and furniture categories.
  • Expansion is part of the plan to add 10 new fulfilment centres and expand 7 existing sites across India.
  • India e-commerce is booming and is expected to grow at 40 per cent with a GMV  of $38 billion this year.
  • Flipkart has increased its last-mile reach with more than 3,000 facilities across the country.
  • The total warehousing space for Flipkart now totals to over 18 million square feet.



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