Amazon May Merge Small Delivery Hubs To Scale Grocery Business

Amazon Fresh, the ecommerce giant’s grocery and fresh produce delivery service, could soon fulfil orders through large delivery hubs in Bengaluru and Hyderabad. The two hubs will consolidate Amazon’s smaller grocery delivery hubs in these cities and the plans for the same are approved, according to a company source.

The smaller hubs apparently didn’t work out for Amazon Fresh and their consolidation is expected to help scale the business in the two cities.

“The plan has been approved and designs shared. Work starts now. A decision was made to consolidate Amazon Fresh deliveries from a single location in order to scale the business,” the unidentified source was quoted as saying by ET.

Amazon Fresh has 15 nodes across four cities in India, the report added.

Amazon has been betting big on India and Amazon Fresh is just one part of the company’s big plans for the market. Amazon founder Jeff Bezos, who was on a three-day visit to India, said that this century belongs to India. He also said that factors like dynamism, energy, and the interest of people in self-improvement will show results. “21st century is going to be India’s century,” he proclaimed.

Additionally, Bezos also announced that the company will be investing $1 Bn in India to support small and medium-sized businesses (SMBs). In a chat with Amazon India Head Amit Agarwal, Bezos said that the investment will digitise Indian SMBs and will help them to export goods valuing over $10 Bn worldwide by 2025.

Amazon Fresh was launched in India in August 2019 under Prime Now. Customers can place orders across a selection of more than 5K products — fruits and vegetables, dairy, meat, ice-creams, and dry grocery like staples, packaged food, personal care and home care. The service is available exclusively for Prime members with fastest two-hour delivery slots for INR 49. Amazon Fresh was launched in Seattle in 2007 and has been the flagship food and grocery delivery offering globally.

India is expected to account for 13% of Amazon’s international sales and 4% of overall sales by 2023, says an RBC Capital Market report. Sales in India are expected to generate a total of $32 Bn by 2023, which would give Amazon India a market share of 35% in Indian ecommerce.

In Q2 of FY 2019, Amazon reported a 37% year-on-year growth, with the company’s revenue reaching $33 Bn from the earlier $24 Bn. The company reported net sales of $63.4 Bn, an increase of 20% from the second quarter of 2018.

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