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The Ecommerce Rumble For Logistics

Delivery times for ecommerce goods are getting ever shorter with the number of same day and one or two hour delivery services rising. This has had a knock on effect on customer expectations. End recipients are demanding greater flexibility as well as more delivery options, fitting around their lifestyles, rather than around the operational processes of last mile delivery companies. With this, frequent peaks and troughs of demand have opened up many opportunities for ecommerce players and their logistics partners.

Surya Kannoth

Amazon’s Prime Day sale which started as a sales promotion five years ago in the US has now become more than a big deal in the supply chain and logistics circles. In its third year in India, ahead of the big two-day shopping extravaganza (July 15-16), the e-commerce giant announced the expansion of its network of specialized fulfillment centers and delivery stations for large appliances and furniture. The company launched specialized fulfillment centers in two new cities - Patna and Guwahati and added more storage capacity to its existing specialized FCs in New Delhi, Mumbai, Bengaluru, Hyderabad, Kolkata, Ludhiana, and Ahmedabad among other cities.

Amazon India now has a network of specialized fulfillment centers with close to 9 million cubic feet of storage space, an increase of close to 40 percent from December 2018. Amazon also increased its specialized delivery network from 60 to over 80 delivery stations this year. Expansion of this network is expected to ensure faster deliveries to close to 14,000 pin codes, increasing over two times from 2018. Customers from over 60 cities can now receive next day deliveries in these categories.

Kaveesh Chawla, director – category management, Amazon India said in a statement, “Our investments in infrastructure, installation services, and sound finance options have led to changes in customer behavior and adoption of online shopping for large appliances and furniture. With this infrastructure addition, we want to extend scheduled and next day deliveries to more customers. We continue to be relentlessly focused on providing a superior experience for customers buying products in these categories.”

India is going online in a big way, particularly on the back of the government’s push for a digital economy. More people are buying online than they did two years ago, and digital payments have got a boost since the demonetization. Riding on the growth, thanks to increasing online transactions, cheaper internet and rising retail awareness in India, the logistics segment that supports e-commerce operations has been experiencing structural shifts.

Ecommerce and automation are continually blurring the lines between the retail sector and e-commerce marketplaces and leading to a transformation in supply chains as well as a rise in investments. It has also been catalyzing the retail goods movement and, as its direct result, serving as an enabler of new-age logistics infrastructure within the country.

To keep up with increasing demand from e-commerce channels and meet the expectations of consumers, companies are now investing in their warehouses and distribution centers and working on implementing advanced supply chain and logistics processes.

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July - August 2019

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