The US online shopping giant Amazon is getting bigger and better each day, specifically on delivering, irrespective of whether you order on their site or another.
According to reports coming in, Amazon is looking forward to expand its logistics business in India by offering its services to registered sellers across the country, irrespective of whether it is of their own rival marketplaces such as SnapDeal or Flipkart. Other than this, it is also looking forward to the food delivering market and competing with Swiggy, a food delivery agency that Amazon allegedly wanted to acquire. Reportedly, Amazon is also in initial talks with certain food start-ups over this matter.
As per the reports furnished by three executives aware of the plan, Amazon has already launched a pilot for the logistic services with about three hundred sellers who have registered with its marketplace. Amazon Transportation Services (ATS) has already taken over the company’s own logistic requirements.
This development seems to be a part of the Seattle-based e-commerce giant’s strategies to control the better part of the Indian e-commerce market. Earlier, ATS was responsible for servicing the Fulfilled By Amazon (FBA) orders – a special branch of Amazon where the seller stores the products at Amazon warehouses from where they are packed and shipped directly to the doorsteps of the customers.
According to an industry executive:
Amazon wants to build ATS into an independent logistic service which competes against Flipkart’s Ekart and other independent logistic services like Blue Dart (BSE -0.42 %) and FedEx. It has started with its own sellers, but eventually will even look at offering logistic services to brands and other businesses. ATS has recently hired a lot of executives from leading courier companies.
Another executive has divulged the secret behind Amazon’s great plan. According to him, Amazon has priced its ATS at extremely competitive rates to sellers, which is way below those quoted by third-party sellers:
Amazon wants to control each and every segment of the e-commerce value chain, since they also sell packaging materials for online shipments.
However, when contacted, the spokesperson for Amazon refused to divulge any of their future plans.
According to the co-founder of ExclusiveLane, a leading furnishing and craft seller which has tied up with Amazon for quite long, Amazon’s international repute and extensive sellers’ portfolios would compel numerous online agencies to tie-up with the former’s logistic services. And Amazon, too, on the other hand would not leave any stone unturned to cash in on the great business possibilities and, hence, offer their services to registered sellers from across the country:
They would also be extending these services to sellers to send their FBA and Cloudtail shipments which are currently fulfilled by logistic companies such as BlueDart, DTDC and FedEx. These companies are going to have a hard time competing with Amazon.
It is to be noted that e-commerce has been quite a boon to the otherwise dwindling Indian logistics sector. According to a report furnished by KPMG and CII, the logistic sector specific to online retailing in India was valued at $0.46 billion in 2016 and is projected to witness a CAGR of around 48% in the next five years to reach $2.2 billion by 2020.
On the other hand, EKart, which is Flipkart’s own logistic arm, is also looking forward to tap offline networks for its courier business and compete with third-party logistic companies like Blue Dart and DTDC among others. At present, 90% of Ekart’s resources are used for Flipkart group companies while the rest is being utilized for external clients and businesses.