Need To Shorten Delivery Time In Non-Metro Cities: Amazon India Head

Amazon country manager Samir Kumar said that the company has barely scratched the surface when it comes to ecommerce expansion in India

He shared that the company is currently working on trimming down its timeline for deliveries in non-metro areas of India

Kumar claimed that the company gets 65% of its business during peak periods from non-metro regions

Even as ecommerce giant Amazon India gears up to enter the quick commerce segment, its country manager Samir Kumar is bullish on the company’s traditional ecommerce play. Speaking on the sidelines of Amazon’s ‘Smbhav Summit’, Kumar said that the company has barely scratched the surface when it comes to ecommerce expansion in India. 

While Amazon is seeing increasing demand from non-metro cities, Kumar believes that it needs to improve delivery time in these cities.

“I am really excited about the growth we are seeing in “Bharat”. To further penetrate this market, we need to improve our speed on deliveries. I am not happy with the progress we have made in the last few years on this front. While we have improved delivery timelines in big cities, we are still in the process of trimming our delivery timelines in non-metro cities,” Kumar said. 

Despite this, he claimed that the company gets 65% of its business during peak periods from non-metro regions. 

This is in line with the high demand witnessed by the ecommerce company from Tier II and beyond cities during its flagship ‘Great Indian Festival’ sales every year. As per reports, Amazon India’s gross merchandise value during the 2024 festive season sale crossed the INR 1 Lakh Cr mark ($12 Bn) in 2024 as against INR 81,000 Cr in 2023

Last month, Amazon India’s shopping experience director Kishore Thota told Inc42 that 85% of the customers who shopped online during the sale and nearly 70% of Prime members hailed from Tier II & III cities. 

Ecommerce Unimpacted By Quick Commerce

Kumar also delved into the company’s plans on the quick commerce front. Amazon plans to pilot a 15-minute offering this month and would look to capatilise on its large inventory size.

Kumar claimed that Amazon’s inventory for the festive season stood at 3 Mn SKUs. However, the quick commerce offering will be focussed on providing users with daily essentials like groceries. 

In terms of premium or electronics product offerings on the quick commerce platform, Kumar said that products like electronics or phones are high-consideration items that customers don’t purchase frequently. 

“Convenience is what we have built Amazon on. Quick commerce is a play on convenience. We are going to have our everyday selection of essentials like groceries. These deliveries will be made possible within this month and we will be delivering in 15 minutes,” he said. 

Despite the increasing popularity of quick commerce, the Amazon India head opined that the ecommerce market has not been impacted by it. He believes that the key for a ecommerce business to thrive is its ability to make available a bigger range of products than what offline retail stores offer. 

Amazon Targets $30 Bn Of Exports 

Kumar, who previously held the helm of Amazon’s export initiatives, said that the company has set an ambitious target of facilitating over $80 Bn in cumulative ecommerce exports from India by 2030.

“This significant milestone will be driven by a combination of enabling exports through Amazon’s Global Selling program for Indian MSMEs, manufacturers and D2C startups as well as sourcing Made-in-India products to be sold on Amazon’s global marketplaces,” Kumar wrote in an Amazon blog post. 

Earlier, the company had set a target of $20 Bn ecommerce exports by 2025.

Kumar said that Amazon has enabled cumulative exports of nearly $13 Bn and created nearly 1.4 Mn direct and indirect jobs in India till date. 

Addressing Workers’ Issues 

Despite this, Amazon has been caught up in many regulatory issues in India. Besides, it has also been marred by protests from workers from time to time. Last month, about 200 Amazon India workers protested in New Delhi under the “Make Amazon Pay” campaign. The protesting workers were up in arms about the company’s pay structure, claiming that their basic salary is INR 10,000 as against the minimum requirement of INR 25,000. 

Responding to a question on the workers’ strike, Kumar said that the company adheres to the highest standards. “We employ over 1,60,000 people in India, and during peak times, this number increases significantly. With such a large workforce, there will always be challenges,” he said.

He highlighted the “inclusive” working culture of Amazon India and said that its fulfillment centres have over 30% women employees. Besides, people with disabilities and LGBTQ+ employees are also a part of its workforce, he claimed. 

It is pertinent to note that Amazon made several significant announcements during the ‘Smbhav Summit’. It said that it will invest $120 Mn (around INR 1,018 Cr) through its venture fund to support startups in manufacturing and AI sectors in the country. 

The investment will be made through the Amazon Smbhav Venture Fund as part of a MoU signed between the ecommerce major and the Department for Promotion of Industry and Internal Trade (DPIIT).

Apart from this, the company said that it now offers its logistics expertise to businesses across India with Amazon Shipping and Amazon Freight. Piloted earlier this year, Amazon Freight offers streamlined full truckload freight services for intra-city and inter-city transportation to SME and D2C brands across India. 

The company also claimed to have surpassed its target of digitising 10 Mn MSMEs by 2025 a year ahead of schedule.