Amazon adds 6 warehouses to expand reach

American e-commerce giant says it has the largest warehousing space among companies in the segment in India

Amazon, the American electronic commerce giant, says it has the largest amount of warehousing space among companies in the segment in India, after adding new facilities at Chennai, Delhi, Jaipur, Mumbai and Coimbatore. Its warehousing capacity has reached 2.5 million sq ft across 10 states.

Playing catch-up with rivals Flipkart and Snapdeal, it aims to boost sales on its platform by enabling more small sellers to do so. In turn, it expects to reduce shipment time to customers, especially during the high buying period around Diwali.

Last month, Amazon announced a further $3 billion (Rs 20,300 crore) cash infusion into its India business, money it will spend to increase its scale and to penetrate into smaller cities. The new warehouses, which it terms 'fulfilment centres' will help, "enabling faster and quicker delivery to consumers across the region” that each serves, said Akhil Saxena, vice-president at Amazon India. 

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The company says these fulfilment centres make available 1.3 million products for immediate shipping on its platform, with 80 per cent of its sellers utilising the service. Sellers send their products to the closest centre, from where the company picks, packs and sends it to the customer. Amazon also handles returns.

Flipkart, the leading e-commerce marketplace in this country, grew to its size on such customer service.. However, sensing competition from Amazon, it chose in 2015 to focus more on sales growth, and this hurt its image. Now, Flipkart is going back to focusing on customer satisfaction.

Amazon realises that to beat Flipkart, it also needs to improve service. It is now offering cash on delivery and next-day, same-day and Sunday deliveries. And, working to make selling on its platform more lucrative by lowering commissions across key categories such as electronics.

While Flipkart continues to lead in India, its share of the e-commerce market remained largely flat during the first three months of this year. On the other hand, a big drop in market share for Snapdeal, due to cutbacks on smartphone discounts, allowed Amazon to overtake it and get nearer to Flipkart.