To build a country-wide network of warehouses, expand to tier 2 and 3 cities where 50% of its FMCG sales are happening
Amazon India is aggressively expanding its Pantry service, now offering groceries and consumables across 29 cities since the services were launched in Hyderabad last year.
It is building a country-wide network of warehouses to execute it. At present, it has 27 warehouses across 10 cities.
"Last year, we launched Amazon Pantry in some of the metro cities and we have now expanded it to 29 cities. Since our launch in Hyderabad, we have taken about six months to come to a city like Kolkata as we have to build the capabilities to ensure that we can offer next-day deliveries. We have to create fulfilment centres or warehouses having stocks that people of a particular city want. In cities like Mumbai or Delhi, we have built up to three warehouses each of varying sizes. Overall, we have now about 27 warehouses across 10 cities across the country and that's where all our investments in our infrastructure go in," Amazon India director category management FMCG, Saurabh Srivastava said.
"We would be expanding more to tier 2 and tier 3 cities from where 50% of our FMCG sales are happening," he added.
FMCG segment has grown by 165% last year and 250% in last 18 months for Amazon.
"We would continue to see similar growth," Saurabh said.
The selection in the consumable category is over 19 lakh products with nearly 9,000 sellers selling under the FMCG category on the online marketplace.
Now that Amazon is also selling daily food items, it has to ensure that specialised zones are created within warehouses meeting food safety and various other licensing conditions.
"While we believe foods are super essential for our success, the category also needs heavy investments as we need to be as close to consumers as possible."
Going beyond books, apparel, appliances or mobile phones, Amazon is now concentrating on items of daily use to create engagements with customers every day through programs like Pantry, Amazon Now and Subscribe and Save.
Amazon Now, being tested in four cities promises deliveries in two to four hours.
In Subscribe and Save, monthly items of consumables from toothpaste to diapers can be supplied every month without having to make repeated orders.
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