Amazon are set to invest $2BN in Amazon India, with an additional 5 new fulfilment centres being opened it is clear that Amazon are keen to build their Indian business aggressively. The number of Amazon fulfilment centres will reach 7 – Delhi, Chennai, Jaipur, Ahmedabad and Tauru will join Mumbai and Bangalore.
As more and more spend goes into infrastructure and supply chain, Indian growth in ecommerce is set to expand rapidly. Amazon aren’t the only ones building fulfilment and warehousing capability – so are Flipkart and Snapdeal.
Flipkart covers Mumbai, Delhi, Kolkata and Bangalore, with more planned to meet the demands of their 18mn users. As for Snapdeal, they appear to be trail blazing, with 40 Fulfilment centres positioned in 15 of the largest Indian cities.
Around $2Bn of online sales per annum are being generated currently in India. That’s clearly just the tip of the iceberg – a population of over 1 billion will be able to do a lot better than that as the logistic infrastructure improves and bandwidth gets rolled out. Forrester reckon the market is good for $76Bn by 2021.
Transportation is the big challenge, road, rail and air all have fundamental problems – but it’s clear that with such a huge opportunity things will change for the better sooner rather than later. And payments can also be problematic – but financial transaction problems have a habit of getting sorted out when money is at stake.
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