Amazon May Export Delivery Lessons From India to Cut Costs Abroad

Advertisement
By Reuters | Updated: 13 November 2015 12:20 IST
E-commerce giant Amazon.com is taking lessons learnt from its daily battles with India's choked roads and cramped cities to some of its largest developed markets, exporting a model of cheaper deliveries and reduced warehousing costs.

Online shopping is booming in India, where millions of consumers are newly able to access the Internet thanks to cheap smartphones. For Amazon, it is already the largest contributor of new customers outside the United States.

But, like local rivals Flipkart and Snapdeal, Amazon has struggled with deliveries in cities where snarl-ups are frequent and road signs unreliable. In response, firms have set up logistics networks and use motorbikes instead of trucks.

Advertisement

Flipkart, for one, has tapped Mumbai's dabbawalas, a more than a century-old lunch box distribution service.

More than two years on from its arrival in India, Amazon says it is now ready to apply some of the innovations applied here to markets including the United States, Mexico and Brazil.

Britain, for example, could get a delivery service called Easy Ship, where orders are picked up by Amazon's crew directly from sellers, cutting out the time and cost of sending goods to a warehouse and the need for more space.

"It's not just that we learn from the big brothers like North America," Akhil Saxena, director of operations at Amazon India said in a recent interview at the company's local headquarters in the southtern city of Bengaluru.

Advertisement

"There is so much focus on India and the kind of growth that is happening here... People say, if it works for them, let's see what we can pick and learn," said Saxena.

E-commerce in India could grow to $137 billion by 2020 from $11 billion in 2013, says Morgan Stanley, and firms like Amazon, local market leader Flipkart and rival Snapdeal, backed by Japan's SoftBank, are fighting for a bigger share.

Advertisement

Speedy and cheap delivery is critical to winning over customers in a cut-throat industry, where heavy discounts mean firms are already burning through substantial cash to grow.

Harish Bijoor, an independent brand expert and business analyst, said the innovative delivery services were helping Amazon extend its reach in India, even at the cost of giving up some control over logistics - a lesson it could export.

Advertisement

"E-commerce is a trust business today and without that you cannot achieve scale," Bijoor said.

Made in India
Unlike in its other markets, government restrictions on foreign investment mean Amazon operates in India purely as a marketplace, rather than hawking its own goods. That tightens its relations with a multitude of sellers, and underlines the need to keep those connections simple.

Launched in India in 2014, Easy Ship, for example, cuts out costs of storing, packing and separately shipping goods.

"This probably cuts your overall transportation cost at least by half," said Samuel Thomas, Amazon India's director of transportation, adding that it trains sellers to provide the service, now used by 30,000, or more than 75 percent of them.

Another service introduced in India in May and considered for export to other markets, Seller Flex, allows sellers to have the flexibility to store goods and ship them to customers on their own, instead of routing them through Amazon.

Amazon provides technology and training to ensure goods are packed, labelled and delivered as the company would.

While Amazon in developed markets may not want to tweak its model for best selling goods, analysts said, it could consider the made-in-India seller solution to cut down on warehousing and delivery costs for thousands of "non core" products which are offered, but infrequently bought.

"Amazon is becoming a lot more flexible about how it services its customers," said Neil Saunders, at UK-based retail research firm Conlumino.

"If you go back about five years ... it was fairly one-dimensional. Now you have Amazon Prime, in some cities you have same day deliveries, a couple of hour deliveries ... And this is part of that."

© Thomson Reuters 2015
 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Advertisement

Related Stories

Popular Mobile Brands
  1. Amazon Great Indian Festival 2026: Best Premium Smartwatch Deals
  2. iPhone Duo Pre-Orders in India Begin Today: Price, Offers
  3. Amazon Great Indian Festival 2026: Best SSD Deals
  4. Samsung Galaxy F70 5G Will Launch in India on This Date
  5. Tecno Spark 50S 5G With a 6,500mAh Battery Debuts in India: See Price
  6. Microsoft Announces $50 Xbox Nano Controller, Launch Set for Next Month
  7. Oppo Find X10 Series to Debut in India With This Industry-First Camera Unit
  8. These Sony Signature Series Walkman Models Launch With Premium Design
  9. John Ternus Explains Why Apple Took So Long to Make the iPhone Duo
  1. OpenAI AI Model Used Another Wallet’s Ethereum Testnet Funds Without Authorisation, Report Says
  2. Samsung Galaxy SmartTag 3 India Launch Timeline Confirmed by Company Executive
  3. CERT-in Issues Critical Warning After AI Agents Broke Into Indian Organisations' Live Systems
  4. Microsoft Announces $50 Xbox Nano Controller, Launch Set for Next Month
  5. Samsung Galaxy A38 5G Rear Camera Specifications Leaked; May Feature Same Sensors as Galaxy A37
  6. Meta’s Muse Spark Open Model Brings 1M-Token Context Window, Agentic AI Workflows to Apple Mac Studio
  7. Oppo Find X10 Pro Max Confirmed to Launch in India as First Phone With a Triple 200-Megapixel Camera System
  8. Ripple Partners With Cross River to Integrate RLUSD Into Core Banking Platforms
  9. Redmi K100 Officially Confirmed to Launch Later This Month; Pre-Orders Begin
  10. YouTube Music Will Now Display Labels for AI-Generated Music Integrated into the Player
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.