EYEING RECORD SALES, E-COM FIRMS ON EXPANSION SPREE
Amazon boosts storage capacity by 40% ahead of festivals; Flipkart isn’t behind either
E-commerce firms, such as Amazon and Flipkart, are strengthening their supply chain network by adding new facilities ahead of the festive season. They are also scaling up their hiring initiatives to meet consumer demand.
The Covid pandemic has accelerated the shift to e-commerce, with consumers shopping online at a higher frequency.
“For us, the festive season is one of the largest (events) in the country,” said Akhil Saxena, vice-president, customer fulfilment, APAC, MENA and LATAM, Amazon, told Business Standard. “Whether retail or online commerce, customers want to buy new selections, get deals, and have a great shopping experience.”
These sellers are stocking the latest models of household appliances, mobile phones and personal computing products, besides personal care items. “And to keep that inventory, we want to create infrastructure,” said Saxena. “Ahead of the festive season, we will increase the storage capacity of the fulfilment network by 40 per cent (over last year).”
With this expansion, Amazon.in will have more than 43 million cubic feet of storage capacity across 15 states, supporting around 850,000 sellers in India. “Ahead of this festive season, we’ve expanded the storage space in multiple states — Maharashtra, UP, Telangana, Tamil Nadu, and Karnataka,” the executive said.
Amazon India’s fulfilment network will be spread across a floor area of more than 10 million square feet. This is more than the size of 125 football fields, housing millions of products from notebooks to dishwashers. Also, over 11,000 offline retailers and neighbourhood stores in Maharashtra are now part of ‘Local Shops on Amazon’.
Amazon has committed that it would create around 2 million direct and indirect jobs in India by 2025. According to the company, it has already created around 1 million direct and indirect jobs. Deepti Varma, HR Leader, Corporate, APAC, and MENA, Amazon, said that even during the pandemic, the firm created around 300,000 direct and indirect jobs across technologies, content creation, retail, logistics, and manufacturing. Amazon said it is currently in the process of hiring for over 8,000 direct job openings across 35 cities in the country.
Last year, e-commerce firms witnessed blockbuster festive season sales. India’s online festive sale for a month during October-november last year raked in $8.3 billion in gross sales, including for brands and sellers, up 65 per cent year-on-year, exceeding forecasts, according to a report by consulting firm Redseer. E-commerce industry executives said that they are expecting to witness even better growth this year.
Another major e-commerce firm Flipkart is also strengthening its supply chain network across the country by adding new facilities ahead of the festive season. These new fulfilment centres should help create deeper capabilities to support thousands of sellers, MSMES (micro, small and medium enterprises), and small farmers to cater to the growing customer demand. The company said these measures would also create more employment opportunities while enabling faster deliveries for consumers.
“The expansion you do in a year becomes the benchmark for next year. There is a big jump in that this year and this is being filled from a supply chain perspective,” said an industry executive in the know of the demand witnessed by Flipkart. “The demand is coming back, which would boost the economic activity and warehousing space and jobs on the ground.”
Flipkart recently strengthened its supply chain network in Karnataka – it added three facilities ahead of the festive season. These new facilities will serve sellers of large appliances, furniture, mobile phones, apparel, and electronic items, and are located in Kolar, Hubli and Anekal. The facilities are helping more than 10,500 sellers.
It said the expansion will further contribute to the state’s economy and create additional 14,000 direct and indirect job opportunities, as sellers get national market access for their products.