Ahead Of Festive Season, Amazon, Flipkart Scale-up Facilities Across India

E-commerce firms such as Amazon and Flipkart are strengthening their supply chain networks with the addition of new facilities ahead of the upcoming festive season. They are also scaling up their hiring initiatives to meet consumer demand.

The coronavirus pandemic has accelerated the shift to e-commerce, with an increasing number of consumers shopping online at a higher frequency.

“For us festive season is one of the largest (events) in the country,” said Akhil Saxena, vice president, Customer Fulfilment, APAC, MENA and LATAM, Amazon, in an interview. "It is for the whole country whether it is retail or online commerce, where customers want to buy new selections, get deals and have a great shopping experience."

These sellers would be bringing in new appliances and models of mobile phones, personal care items and personal computing products. “And for keeping that inventory we want to create the infrastructure,” said Saxena. “Ahead of the festive season, we will increase the storage capacity of the fulfilment network by 40 per cent.”

Amazon India plans to expand its fulfilment network in India, with a nearly 40 per cent increase in its storage capacity over the last year. With this expansion, Amazon.in will have more than 43 million cubic feet of storage capacity, across 15 States, supporting around 850,000 sellers across India.

“Ahead of this festive season, we’ve expanded the storage space in multiple states like Maharashtra, UP, Telangana, Tamil Nadu and Karnataka,” said Saxena.

The expansion is in line with Amazon India’s continued efforts to heavily invest in the country and create tens of thousands of direct and indirect work opportunities. Amazon India’s overall fulfillment network will be spread across a floor area of more than 10 million square feet. This is more than the land size of 125 football fields, housing millions of products from notebooks to dishwashers.

Also, over 11,000 offline retailers and neighbourhood stores from Maharashtra are now part of ‘Local Shops on Amazon’.With the upcoming festive season, Amazon is focused on helping Local Shops sellers grow their business and recover from the recent economic disruption caused by the pandemic.

Amazon has committed that it will create around 20 lakh direct and indirect jobs by 2025. It has already created around 10 lakh direct and indirect jobs. Deepti Varma, HR Leader, Corporate, APAC, and MENA, Amazon, said that even during the pandemic, the firm nearly created around 3 lakh direct and indirect jobs across technologies, content creation, retail, logistics, and manufacturing. Amazon said it is currently hiring for more than 8000 direct job openings across 35 cities in the country.

Last year, e-commerce firms witnessed blockbuster festive season sales. India’s online festive sale for a month — during October-November — raked in $8.3 billion in gross sales, including for brands and sellers, up by 65 per cent year-on-year, exceeding forecasts, according to a report by consulting firm RedSeer. E-commerce industry executives said that they are expecting to witness more growth than that this year.

Another major e-commerce firm Flipkart is also strengthening its supply chain network across the country with the addition of new facilities ahead of the upcoming festive season. These new fulfilment centres will help create deeper capabilities to support thousands of sellers, MSMEs (micro, small and medium enterprises), small farmers to cater to the growing customer demand. They would also create more employment opportunities while enabling faster deliveries for consumers.

"The expansion you do in a year becomes the benchmark for next year. There is a big jump in that this year and this is being filled from a supply chain perspective,” said an industry executive having knowledge about the demand witnessed by Flipkart. “The demand is coming back which would boost the economic activity and warehousing space and jobs on the grounds.”

Flipkart recently strengthened its supply chain network in Karnataka with the addition of three new facilities ahead of the upcoming festive season. These new facilities will serve sellers of large appliances, furniture, mobiles, apparel and electronics and are located in Kolar, Hubli and Anekal. The facilities are helping more than 10,500 sellers. The expansion will further contribute to the state economy and create additional 14,000 direct and indirect job opportunities, as the sellers get national market access for their products.

Recently, Flipkart also strengthened its tech-enabled supply chain network in Maharashtra with the addition of four new fulfilment and sortation centres to support local sellers from the state and cater to the growing demand for e-commerce. The new facilities located in Bhiwandi and Nagpur are helping create over 4,000 direct and indirect jobs. Apart from growing customer demand, this expansion comes on the back of a growing seller count from the state which rose by 30 per cent in the last year.

E-Retail has particularly been a boon during the Coronavirus (Covid-19) pandemic after the setbacks caused by widespread disruption (for consumers and small businesses) and loss of jobs. In the future, the e-retail market is expected to grow to $120–140 billion by FY26, increasing at approximately 25 per cent–30 per cent per annum over the next 5 years, according to the report ‘How India Shops Online 2021’ by Bain & Company in association with Flipkart.

The growth will be led by smaller towns that account for four out of five new shoppers. In addition to small towns, women and older shoppers have gained prominence in the online shopper base over the last year, and this trend is expected to continue.

Experts said as e-commerce companies are expanding their operations to penetrate deeper into the smaller towns, their supply chain and logistics considerably ramped up paving way for more seasonal hiring (about 25-30 per cent as per reports) across tier-2 and tier-3 cities.