In a bid to strengthen its foothold in India, Amazon has opened 15 fulfilment centres to create a specialised network for its hyperlocal grocery delivery business on Amazon Now.
The new centres have come up in the four cities where Amazon Now is currently available: Bengaluru, Delhi, Hyderabad and Mumbai.
With the latest addition, Amazon now has 56 fulfilment centres across 13 states with a storage space of 13.5 Mn cubic feet. Of this, Amazon Now will have 120K cubic feet of space.
The new fulfilment centres will have temperature-controlled zones to store and deliver perishable products such as fruits and vegetables, dairy products, and frozen products.
Amazon Now will offer fruits, vegetables and dairy products. The customer can choose from various daily essentials to household basics on the app.
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Also, the company offers two delivery options: Rush delivery (two hours) and same day scheduled delivery.
On the development Akhil Saxena, VP for customer fulfilment at Amazon India was quoted as saying, “With the launch of this specialised network of 15 fulfilment centres specifically for daily essentials, we strongly believe that we will be able to better serve our customers in key metros.”
The latest investment towards Amazon Now comes at a time when Amazon has become first foreign venture to explore food retail market in India. The company received the final nod from the government in July 2017 to invest $500 Mn in its Indian food retail business.
The hyperlocal delivery space in India has seen steady growth, driven largely by players like ShadowFax, Genie, Grofers, Zopnow and BigBasket, among others. Recently in February, BigBasket raised $300 Mn Series E funding in a round led by Alibaba, along with the participation of Abraaj Capital, Sands Capital and IFC.
Earlier in November 2017, Flipkart launched a pilot of its online groceries service under Supermart in Bengaluru. Also, reports surfaced recently that global giant Walmart is in talks to acquire 40% stake in Flipkart.
Given that Walmart currently has a strong presence in the country through its network of 21 Best Price Modern Wholesale stores, it would allow Flipkart to procure grocery and consumer goods directly from Walmart’s wholesale stores, thereby ensuring better delivery speed and product availability.
As per a report by RedSeer Consulting, the Indian online grocery market stood at $1 Bn in 2017. Furthermore, Morgan Stanley expects the online food and grocery segment to contribute $15 Bn or 12.5% of overall online retail sales by 2020, expanding at a compounded annual growth rate of 141%.
Amid the growing activity in the hyperlocal grocery delivery space, the increased capacity of Amazon, with the launch of 15 new fulfilment centres, is bound to help Amazon Now reach a wider section of customers.