Amazon India has been employing aggressive expansion strategy to win over Flipkart for a majority of the share in the Indian e-commerce market. In line with its strategy, the company is now planning to add 7 new warehouses which will open jobs for over 4,000 people.
With the addition of the said seven new warehouses in India, the U.S-based company will have around 41 warehouses or Fulfillment Centers in the country by the end of June.
Amazon has been pumping massive funds in its India operations to expand its infrastructure and technology in the country. Till now, Jeff Bezos, founder and CEO of Amazon, has committed to invest $5 billion in the Indian operations. And has further assured that its operations in the country would receive a continuous supply of capital.
Amazon India Customer Fulfilment Vice President Akhil Saxena, said,
This (new FCs) will double our storage capacity this year as compared to last year. We continue to invest in strengthening our infrastructure to match our pace of business expansion in India.
While he revealed the number of new fulfillment centers (FCs) and the time-frame for the same, he restrained from providing any investment or financial details related to this expansion. FCs are warehouses where the sellers can stock their inventory. Earlier, it had been announced that Amazon will set up new warehouses to cater exclusively to its large appliances and furniture category.
The new centers announced today are located in the states of Telangana, Haryana, Maharashtra, Madhya Pradesh, Uttar Pradesh, and Andhra Pradesh. Saxena further says that,
These new FCs will create about 4,000 new jobs, both temporary and permanent.
Apart from adding new centers, the company is also expanding the capacity of its fulfillment centers in Ahmedabad, as well as Delhi to support the increased demand from customers and well as sellers. Amazon.in has seen the shipment of units grow almost 85% in the first quarter of 2017 and continues to rapidly expand to tier II and III cities.
One of the major competitors of Amazon in the Indian e-commerce market is Flipkart, a homegrown e-commerce giant. It recently secured a massive $1.4 billion funding round from Microsoft, eBay, and Tencent. It also acquired eBay India as a part of the funding deal.
Amazon could soon also face stiff competition from Alibaba-backed Paytm, which recently spun-off its marketplace business into a separate entity — Paytm E-Commerce, to make way for the Chinese e-tailer to lead operations. However, we are yet to see the impact of Paytm Mall.
Also, there have been reports of consolidation in the e-commerce ecosystem of the country. After eBay India, the rumor mill is now chatting about the sale of Snapdeal to Flipkart. If the Flipkart and Snapdeal merger transaction goes through then Flipkart can be on its to becoming more powerful and aggressive in its strategy to capture the Indian market. And with the support of SoftBank — which doesn’t back down in providing funding to its portfolio startups, the e-commerce battle in India could intensify even further.
