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Amazon doubles storage capacity

In India Amazon is using a strategy similar to the US, where a vast network of warehouses allowed it to offer quick, cheap delivery.

Fulfilment centers are extremely critical for the success of its Indian operations. The US-based retailer has doubled its storage capacity in the last one year to meet its rapid growth in India.

Within miles of the new Hyderabad storage hub is one of Amazon’s largest global customer service centers as well as one of its biggest software development facilities in the world. All of these are hidden from public view.

Amazon’s 41 warehouses in India are vital in a country where the largest online retailers are marketplaces without any inventory of their own in accordance with foreign investment rules for e-commerce. Their locations are crucial because the nation’s logistics networks can be unreliable. They have to be close to sellers and with easy access to a density of buyers.

In India, Amazon has adopted a hybrid model, a blend of people and conveyor. Fixed costs are high in the country while labor costs are low, the inverse of the West. So a vast number of workers toil in comparatively smaller warehouses.

In India, the company has grown revenue at about 124 per cent year-on-year, totting up 85 per cent growth in the first quarter and 88 per cent in the second quarter this year.