Amazon scales up operations network to meet festive season demand

Amazon India has added three new fulfilment centres to its existing pan-India operations network, which consists of over 43 million cubic feet of storage space, sort centres in 19 states, and about 2,000 delivery stations.

Amazon India is making significant investments and scaling up its operations network as it prepares to serve millions of customers throughout India during the upcoming festive season.

To meet the festive demand this year, Amazon India has added three new fulfilment centres to its existing pan-India operations network, which includes over 43 million cubic feet of storage space and sort centres in 19 states. It also has about 2,000 delivery stations, Amazon Air service, and partnerships with Indian Railways and India Post. This will help it reach 100 per cent serviceable pin codes.

 

The firm expects its flagship sale event, Amazon Great Indian Festival (AGIF), this year to be the biggest ever. AGIF 2024 will start on September 27, with 24 hours of early access for Prime members.

To meet the festive demand, it has increased the number of sellers from 14 lakh to 16 lakh in the past few months. There will be more than 25,000 new product launches across categories on the Amazon platform. The company has also created over 110,000 seasonal job opportunities.

In 2023, 5,000 new products were launched from top brands across categories, and the company created about one lakh seasonal job opportunities.

“We are confident that the AGIF this year will be our biggest-ever event,” said Saurabh Srivastava, vice president, categories, Amazon India.

Last year, Amazon India saw 1.1 billion customer visits on the platform during the event and almost 4 million new customers.

“This year, we believe all those records will be broken,” said Srivastava.

Amazon's rival Flipkart witnessed a record 1.4 billion customers visiting its platform during its flagship festival sales event, ‘The Big Billion Days’ (TBBD) 2023.

Amazon is also introducing innovations to meet the festive demand. The firm has introduced AI-Generated Review Highlights, leveraging GenAI to provide concise summaries of customer reviews. This feature gives customers quick insights into product sentiment and key attributes, allowing them to make more informed decisions with ease.

The company has also launched Rufus in beta, a conversational shopping assistant powered by generative AI. Rufus enables natural language interactions within the Amazon app, making it easy to ask product-related questions, get recommendations, or compare products.

E-commerce companies and online sellers are expected to ship merchandise worth $12 billion to consumers in India this festive season, up 23 per cent compared with about $9.7 billion last year, according to data from market research firm Datum Intelligence.

Selling fee reduced

Srivastava said that Amazon India has reduced selling fees by up to 12 per cent across various categories. The aim is to deepen the partnership with sellers of all sizes. This will enable sellers to expand their product portfolio on Amazon and grow their business.

Customers can get offers from brands including Samsung, realme, OnePlus, Intel, Sony PlayStation, Hindustan Unilever, P&G, L’Oréal, TCL, Acer, Xiaomi, and IFB Appliances.

There is a 10 per cent instant discount with SBI debit and credit cards and credit EMI. Prime members can get 5 per cent unlimited cashback on shopping with their Amazon Pay ICICI Bank credit card.

Srivastava said brands and sellers are expected to offer discounts of up to 80 per cent on products across categories such as fashion and beauty, home and kitchen, and electronics and appliances. For example, an iPhone 13 is expected to be sold at Rs 37,999.

Amazon is making it easier for customers to support India’s small businesses with exclusive deals and up to 70 per cent off on a specially curated selection.

Amazon is also observing increasing demand from customers in Tier-II and Tier-III cities. He said that Amazon's core is to provide a wide selection. It delivers 19 crore products across the country.

According to industry sources, 15-20-minute deliveries provided by players such as Zepto, Instamart, and Blinkit are taking a significant portion of sales away from Flipkart and Amazon.

However, Srivastava said that Amazon Prime now delivers more than 10 lakh items same-day and more than 40 lakh items next-day.

“Speed is one of our core pillars, besides wide selection and value,” said Srivastava. “Features such as guaranteed delivery, two-day and one-day delivery started with Amazon. Now we are into same-day delivery or 4-6 hour delivery of products. We are constantly pushing the envelope on that. But we don’t do it in isolation. It has to come with a very large selection and great prices.”

Return of products

At a time when some industry experts say that e-commerce platforms may set a higher bar for accepting returns than in previous festive seasons to maintain margins, Srivastava said the firm has not formed any specific policy related to that.

“We continue to evaluate what the return policy should be and what is fair. But we have not changed anything for the festive season,” said Srivastava.

Srivastava said one has to make policies that provide a balanced playing field for both customers as well as sellers. Also, the return policy for a product like a diaper would be different from that of a phone or a food item.