In a bid to overcome FDI restrictions on multi-brand retail in India, world’s largest Internet retailer Amazon.com Inc is setting up its first “fulfillment center” in India. The fulfillment center is based in Mumbai, the biggest city in the country, according to job listings on Amazon’s India careers website. Amazon “has an immediate opening for an IT Manager in our first Fulfillment Center based out in Mumbai, India,” one recent listing said. Another recent Amazon job posting sought a “Stations Operations Manager” to work for the fulfillment center team in Mumbai.
Fulfillment centers are giant warehouses that help Amazon and other online retailers store many products, ship them and handle returns quickly. Amazon was also recently looking for a financial analyst in Mumbai to report to a general manager and controller and help the fulfillment center operate more efficiently and predictably. Currently, they are also hiring on in Hyderabad, Bangalore and Chennai to fill up the various positions like Software Development Manager, Workflow Analyst in this team.
Amazon spent heavily last year setting up more than 10 new fulfillment centers in the United States. The company also lists fulfillment centers in China, Germany, Japan and the U.K. on its website, but currently lists none in India. At present, Amazon has software development centers in Bangalore, Chennai and Hyderabad and a customer-service center in Hyderabad. Shoppers in India can also buy products from Amazon websites in other countries and have the items shipped to them. The company currently has stores in Canada, China, France, Germany, Italy, Japan, Spain, the United Kingdom and the United States of America.
The company does not have a dedicated online retail business in India but they have got firm grounding. “India is a tremendously large potential market for Amazon. Amazon gets more traffic from India than Flipkart does, even though the former has no formal presence in India,,” said Mahesh Murthy to The Economic Times, a venture capital investor in India and founder of digital marketing start-up Pinstorm.
Fulfillment centers cost a lot to set up, so Amazon’s efforts to start one in India signals the company is serious about getting into the country’s $550 billion retail market. Amazon started off as a book seller but later diversified into other categories along with expanding its portfolio with such portals as diapers.com, soap.com, myhabit.com and zappos.com, besides several others. Last year, they launched a country-specific site in Spain and now it looks like India could be next.
What is Amazonian edge of “fulfillment center”?
The tasks of product distribution and knowledge work right into the flow of more automated business processes such as order taking and payment processing. Fulfillment service by Amazon lets small and midsize businesses send their inventory to Amazon warehouses. Then when a customer places an order, Amazon gets an automated signal to ship it out–no muss, no fuss, no servers or software or garages full of stuff. With all these initiatives, Amazon empowers new startups, which are hungry to knock off Internet leaders that happen to be Amazon competitors. In nutshell, Fulfillment centers are giant warehouses that help Amazon and other online retailers store many products, ship them and handle returns quickly.
All the existing e-commerce can be paranoid about Amazon, as it has deep pockets, years of experience and a determination to make things work in India.
Technology is a big concern for most large retailers in India, till recently powered by staff provided on contract by Infosys or Wipro. Amazon can employ programmers who know how to generate scalable delivery platforms that deliver millisecond-level responses.
Amazon’s is extremely customer-centric and make their analytics -is what sets them apart and that is their biggest differentiator apart from the size, scale and money. And now Amazon has set up warehouses throughout India.
As soon as Amazon went live on July 16, 1995, the online business took off more quickly for them and the world’s largest retailer steps up its international expansion in its attempt to maintain the blazing rate of growth of recent years. India, with 1.21 billion people and a fast-growing online market and economy, would be an attractive location for the Seattle-based company.
Amazon has a thriving online marketplace in the United States and other countries that accounts for about 40 percent of the company’s revenue. Rolling this out in India will get Amazon into the country, without some of the expenses associated with opening a full retail operation. According to Industry sources, Amazon has struck deals with online retailers as it prepares to launch Marketplace. This would essentially mean Amazon will become an aggregator for online retailers who, in turn, will benefit from the humongous traffic that the internet major generates in India.
The restrictions on overseas multi-brand retailers now effectively exclude giants like Wal-Mart Stores and Amazon from the $550 billion Indian retail market. Amazon is hiring employees and renting warehouses for an India launch. That’s somehow surprising because the current retail FDI regulations do not permit Amazon to set up a majority owned Indian subsidiary. And that is why it may soon have a Indian partner. iamwire will keep you updated with more details as it happens.