Amazon India is gearing up for a higher penetration in the interior of India as it opens new fulfillment centres in the tier-2 cities. On Thursday, the company said that it has launched 5 new fulfillment centres in India, with 4 located in tier-2 cities, Indore, Bhubaneshwar, Kochi, and Rajpura (Punjab).
While the global e-commerce giant already has a good network of fulfillment centers in metro cities like Delhi, Mumbai, and Bengaluru, this first time the company has opened the facilities in the major cities of Kerala, Odisha, and Madhya Pradesh.
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A fulfillment center is an extension of a storage unit or warehouse. While the traditional warehouse is primarily used for storing goods for a short or longer period of time, a fulfillment center also works as a logistics hub for the company.
A fulfillment center processes the order by handling storage, receiving, picking, and shipping functions for the last mile or same-day deliveries of Amazon. The addition of the five new fulfillment centers brings an additional capacity of 1.8 million cu. Feet to Amazon India.
Why focus on tier-2 cities?
The tier-2 cities in India are the next frontier of e-commerce in India as they hold the highest potential. According to an ANAROCK report, India’s e-commerce market is expected to grow from its current size of $125 billion to $550 billion by 2035, and tier-2 cities’ share in the market is expected to grow from the current 56 percent to 65 percent.
Secondly, Amazon India’s Prime Day sale is approaching on July 12, which brings massive orders for the company from the tier-2 cities. According to a RedSeer report, during the purchase seasons like festival seasons, the e-commerce spending from tier-2 cities increases by 13 percent.
Keeping a view of the near-term and long-term business growth opportunities in the tier-2 cities, Amazon India is aiming to serve the customers with a better reach and lower delivery time.
Abhinav Singh, VP Operations, Amazon India & Australia, said in a statement that the company is focused on building and operating India’s fastest, safest, and most reliable logistics network that delivers to customers across the country.
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