With the festive season round the corner, ecommerce firms such as Amazon, Flipkart, Snapdeal and third-party logistics companies are ramping up their delivery capabilities, by investing in warehousing infrastructure.
Amazon India which has already set up 200 new delivery stations across the country added a new fulfilment centre – the largest in India at Kolar on Thursday. With this addition the ecommerce platform now has more than 4 Mn cubic feet across four fulfilment centres in India.
Walmart-owned ecommerce giant Flipkart on the other hand has inked its allotment agreement with Haryana State Industrial & Infrastructure Development Corporation Ltd (HSIIDC) for 140 acres to set up its largest fulfilling centre in Asia. The centre with a covered area of 3 Mn square feet is set to come up at Manesar.
Meanwhile, Snapdeal, which announced its four days sale from October 16 to October 20, expanded its logistics network by opening 25 new centres at manufacturing hubs across 10 cities in India.
This festive season ecommerce majors are looking to make up for the lost sales during the pandemic. Research firm RedSeer estimates GMV to grow by 50% this festive season, as compared to the last. It has also revealed that Covid-driven digital adoption will add 30 Mn-40 Mn new online shoppers in the whole of 2020, in addition to the 130 Mn shoppers recorded in 2019.
“Ecommerce logistics will have to cater to the changing expectations of the customer. On one end, metro shoppers don’t mind paying premiums for quicker deliveries; while value shoppers in Tier 1 cities focus on good deals and are ready to wait an extra day or two for fulfilments. Hence, e-commerce firms through third party logistics partners will have to balance these expectations, while running trials for hyperlocal deliveries,” said Mrigank Gutgutia, director, ecommerce at RedSeer consulting.
Speaking about their plans, an Amazon India spokesperson had said, “Earlier this year, we announced over 70,000 seasonal opportunities across our fulfilment and delivery network and for roles in our customer service teams. We will continue to create thousands of additional opportunities across the network to support customer demand across the country this upcoming festive season, so customers can stay and stay safe.”
Bracing For The Surge
Last year, Flipkart and Amazon recorded a combined gross merchandise value of $3 Bn or INR 19K Cr in India during their respective festive season sales, despite the economic slowdown. Both these platforms made up for almost 90% of the overall ecommerce sales during the gifting season, but Flipkart had overtaken Amazon by a huge margin.
According to the RedSeer Consulting report, the Walmart-owned ecommerce giant reportedly stood at INR 1.9K versus INR 1.4K on Amazon. The homegrown ecommerce giant Flipkart led with a 64% share of the combined gross sales, while Amazon continued to show a higher net promoter score (NPS) which gauges customer loyalty.