Amazon looks to take battle to Flipkart, Jio
MUMBAI: US- based Amazon.com, the world’s largest e- commerce company, is embarking on a massive expansion drive in India, which may not only make the country’s intensifying retail battle way tougher for rivals Flipkart and Mukesh Ambani-owned Reliance Industries Ltd. but also may ensure that Amazon’s online retail business does not get hindered in case the American e-tailer loses its ongoing legal battle with Future Group.
According to two persons close to Amazon, the Seattlebased e-commerce giant, which is entangled in a bitter legal tussle with Future Group, is looking to increase the number of its tie-ups with sellers (small businesses and stores) by 40% to take it to 10 lakh within a year.
Amazon is also planning to forge tie-ups with at least 3 lakh such entities whose India-made products are to be sold to customers in the US, Europe, West Asia, Japan and other developed foreign nations.
According to the two persons, including a top Amazon executive, by doing this, the e-commerce giant has drawn an internal target to increase its revenue from exports from $3 billion to $10 billion in the next four years.
Among a number of other ambitious targets, Amazon is also planning to increase the number of its large tech-heavy Amazon- style warehouses, termed as “fulfilment centres” by Amazon, in India by 30% within a year.
At present Amazon has 70 FCs.
“By the end of the year Amazon is looking to have 100-120 such FCs in India so that customers even in remote locations get a speedy delivery like in metros,” said the first person.
“Our tech-heavy warehouses ( FCs) are built in a different style and are of about 4 lakh square feet each. In Mumbai alone Amazon has four such huge warehouses. Amazon has 1 lakh direct employees; last Diwali, a seasonal hiring of 1 lakh more was carried out; not only warehouses, Amazon has delivery stations and soft centres that are being increased rapidly. Amazon has its own transportation services, globally, Amazon has its own aircraft fleet Prime Air. Amazon’s transportation service is as big as Fedex globally,” said the second person.
At present, Amazon has tieups with over 7 lakh sellers and a third-party service partner network, which basically enables small businesses to create a catalogue that can work online on www.amazon.in.
“A lot of these sellers are wholesalers or small manufacturers. More than 50% of these come from small towns outside of the top 10 metros and that’s why Amazon is building up further on a logistics capacity. In the last 15 months around 250,000 sellers came on board. Amazon’s philosophy is to keep the infrastructure before demand. In the next one year the number of tie- ups with stores and small businesses is planned to be 10 lakh,” said the first person.
“E-commerce accounts for only 2.5% of organised retail. We talk about “make in India”. Today, Amazon has more than 70,000 businesses who are selling their home-grown products through “global sellers” programme, which enables small traders to export their products. And these are all to retail customers,” said the second person.