Amazon opens its largest Indian warehouse, ahead of festival shopping season

The new warehouse, near the city of Hyderabad, where Google, Microsoft and Uber also have centres, expands Amazon's storage capacity in India by 2.1 million cubic feet

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Image: Robert Galbraith

Amazon opened its fifth warehouse in the sourthern Indian state of Telangana, in time for the country’s biggest annual shopping spree that happens in the weeks leading up to Diwali, the festival of lights.

The warehouse, which online retailers call fulfilment centres, covers over 400,000 square feet and adds close to 2.1 million cubic feet of storage space. That increases Amazon’s fulfilment centres in India to 42 and its total storage capacity to over 15 million cubic feet.

Amazon’s founder CEO Jeff Bezos is investing billions of dollars in expanding the Seattle-based retailer’s operations in India, where the company is running neck and neck with local competitor Flipkart. Amazon, which also has a software development centre in India and counts some 120,000 businesses as customers for its Web Services unit, sees India as a market vital to its long-term plans.
 
The new centre, Amazon’s biggest in India, will improve the company’s capabilities to provide one-day and two-day deliveries on a wide range of products, Akhil Saxena, a vice president for India customer fulfilment, at Amazon India said in a press release on Sep. 7. Telangana has more than 10,000 sellers, and the selection they offer on Amazon’s marketplace for immediate delivery has grown more than 120 percent this year as compared to last year, Saxena added.

Increasing its fulfilment centres with its state-of-the-art infrastructure, helps Amazon boost the ‘Fulfilment-By-Amazon’ delivery option, which the company sees as its gold-standard service. When using it, sellers across India send their products to Amazon’s warehouses and once an order is placed, Amazon picks, packs, and ships the order to the customer, provides customer service and manages returns on behalf of the sellers.

Orders fulfilled by Amazon are eligible for cash on delivery, guaranteed next-day, same-day, morning, and Sunday deliveries. With some products, such as popular smartphones, Amazon offers release-day deliveries as well. Sellers always have the flexibility to choose the number of products they want to have fulfilled by Amazon and scale according to their business requirements, the company said in its Sep. 7 press release.

Amazon’s ramp up comes at a time of stiff competition from Flipkart, which closed two large rounds of funding this year, taking over eBay India’s operations with the first and adding SoftBank Group Corp. as an investor in the second. Overall, Flipkart has $4 billion in cash to expand its operations, the Bengaluru company said in a statement on Aug. 10.

The massive build up of storage space is spread over 13 states in India and the related supply chain delivers to 97 percent of postal codes in the country, according to Amazon India, which is led by Amit Agarwal, a former Jeff Bezos shadow executive. Amazon entered India in 2014 and this year offered its Prime Day sale in the country as well.

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