Amazon India plans to more than double its headcount in logistics and delivery space in seven months as it pushes ahead with its offer of providing shipping services to sellers registered on the e-commerce portal.
“The delivery (and logistics team) will touch 14,000 by July,” said a person directly familiar with Amazon India’s plans. It currently has 6,000 people in this team. Another executive said the company will first increase its headcount to 9,000 by March.
After the hiring, Amazon will have the largest delivery and logistics team among e-commerce players in the country, beating Flipkart that has a 12,000-strong team handling about 85% of goods sold on the portal.
A spokeswoman for Amazon India confirmed aggressive hiring plans, but declined to share details. “Encouraged by our growth and plans for the year ahead we have outlined an aggressive hiring plan across all aspects of our business,” she said.
This push underlines Amazon’s broader strategy of strengthening its ‘Easy Ship’ service, whereby it undertakes delivery of goods stocked at sellers’ warehouses to consumers when an order is placed.
Of the 16,000 registered sellers with Amazon India, 7,300 use this service to connect with consumers in 284 cities. Amazon India says Easy Ship service currently takes care of 15% of its total deliveries, with sellers on an average reporting 50% uptick in sales since it launched the service in April.
“We believe it is owed to the profitable growth they see on our platform enabled by logistics services such as FBA (Fulfilled by Amazon India, under which it ships goods from its own warehouse) and Easy Ship,” said the company spokeswoman.
Some experts believe this strategy helps in improving operational efficiencies at Amazon India as it does not have to stock all goods at its own warehouse.
“It will also provide significantly higher margin than its operating margin,” said Raghunath Subramanyam, professor of corporate strategy and policy at Indian Institute of Management, Bangalore. “By connecting with the warehouse and distribution network of its suppliers, Amazon also reduces cost of storage and transportation, which allows it to become more competitive.”
Seattle-based Amazon started its India operations in June 2013, six years after Flipkart, and many believe the India unit of the US global is “almost on par” with the home-grown e-commerce firm in building infrastructure.
A Flipkart executive, speaking on condition of anonymity, said, “No doubt they (Amazon) are investing (in building infrastructure), but we still are the largest.”
Amazon currently has eight warehouses across seven states in the country while Flipkart has 13.
Top e-commerce players Amazon, Flipkart and Snapdeal are all strengthening their shipping services as it could prove to be the key differentiator in a highly competitive market. All the three offer same day delivery in some cities, and this service could be expanded to more cities in the coming months, as more than half the people who shopped online in 2014 were from outside metros and large cities.
