India's unique e-commerce story: Insights from Amazon India's VP on the last 10 years

The following is a conversation with Abhinav Singh, Vice President, Customer Fulfilment, Supply Chain & Amazon Transportation Services, Amazon India. Amazon.in recently completed 10 years in India and Abhinav has been with the brand for over a decade witnessing the growth story. Here we discuss the challenges, opportunities, and future of Amazon.in.  

1. How has your personal journey evolved over the past 10 years with Amazon India, from starting as an Operations Manager to your current role as VP of Customer Fulfilment, Supply Chain & Amazon Transportation Services?

It's been an incredible journey. I joined in 2012, a year before we launched Amazon.in as a part of the India launch team. We were a very small team, but we had a big vision. We wanted to transform the way India buys and sells and we wanted to create an enabling ecosystem where millions of sellers can come and transact and every single customer all across the country can come and buy from us. The growth and learning have been immense. I joined Amazon in the Pathways Leadership Development program, a program we have for operations managers, from the Indian School of Business. I am extremely humbled and proud of my journey and look forward to the next 10 years of innovation. I started in the transportation team, building out central monitoring and execution systems for Amazon, I switched to product and software development and then later came back into operations where I started leading what we call Amazon Transportation Services. After leading transportation for about three years in 2021, I took over fulfillment, supply chain, and as well as transportation. So have seen different facets of the organization from floor operations to product and technology and later leading operations at scale. I would like to say that this probably is one of the very few companies where individuals get to work across swim lanes and you can experience growth in different dimensions. It's been a very fulfilling journey for me personally. And quite honestly, these eleven years are something I'm super proud of and super proud of what we've built in India for entrepreneurs and citizens at large.

2. Can you share insights into the growth and expansion story of Amazon India's operations network over the last decade? 

We started Amazon.in with 100 sellers, one fulfillment centre, and delivery stations in select cities and today we have over 1.2 MM sellers offering perhaps the largest selection of products online across the country, a fulfillment network offering 43 million cubic ft of storage space and sort centres across 19 states in India. This has been possible with long-term investments in physical and digital infrastructure as well as enhancing customer and seller experience on Amazon.in. We remain focused on our customers and sellers in India and will continue to invest as needed to transform the way India buys and sells. 

In the last 10 years, we have significantly ramped up our infrastructure and our supply chain footprint across all three miles, building a fast, safe, and resilient network to serve the varied needs of the customers, reaching the remotest corners of the country. Amazon’s fulfillment centers have grown from 0.22 million cubic feet of storage space in 2013 to 43 million cubic feet of storage space in 2023, this is like growing from 2 Olympic size swimming pools to close to 400 Olympic size swimming pools. Similarly, from one sort centre in 2013 to Sortation Centers across 19 states with a processing area of close to 2.3 million square feet. 

In 2013, we started with 24 delivery stations both owned and operated by Amazon, as well as Delivery Service Partners and today the number has reached close to 2000 delivery stations in more than 750 cities. Amazon India’s continued expansion has enabled Amazon to service customers and cover 100% of the serviceable pin codes in India. Amazon has continued to invest in speed with the expansion of its 1-day, Same Day, and Faster Than Same Day delivery network. 1-day delivery is enabled in many remote towns such as Mangaldoi in Assam and Mohanur in Tamil Nadu to name a few. 

3. What are some of the few industry-first products introduced by Amazon India which changed the e-commerce ecosystem in the country completely? Is there some value addition, in terms of e-commerce that you think only Amazon can deliver to the Indian customer?

Back then, customer trust and familiarity with online shopping wasn't what it is today. So, when we introduced easy returns & refunds and cash on delivery, it opened up e-commerce to many more Indian consumers. Easyship and Seller Flex are India's first innovations to simplify logistics for sellers that have now been deployed in several international markets. Today, Easyship makes it possible for sellers from 2500+ cities to make their products easily accessible to Amazon customers across the country. Seller Flex enables sellers to offer Prime-enabled selection from the convenience of their own warehouse. There are 12K Seller Flex sites across India. 

In 2015, we launched ‘I Have Space’, another India-first program, where we partner with local stores and business owners to deliver packages to customers within a 2 to 4 kilometers radius of their store, allowing them to supplement their regular income. Now ‘I Have Space’ is a global program and is successfully adopted in many countries. India is at the forefront of innovation for Amazon which are not only significant in India but also in other geographies. In the coming years, I expect that the speed of innovation will be faster.

4. In your 10 years of experience, what are some of the challenges you faced that are unique to India? And how has Amazon's Operations network managed to solve these hurdles?

There are unique facets of India that are different from other countries. Let's start with the transaction. India is a large cash-on-delivery market so building out a cash-on-delivery service in itself was India-first invention for Amazon. We have since then exported that invention to other countries that we operate in like MENA and Egypt and other countries. Now, in order to digitize that cash we built out what we call pay-on-delivery, under which there are various options for customers to pay at their doorstep using their credit cards, debit cards, and UPI. So, a lot of inventions in the cash space, not only being able to collect cash and reconcile that in our systems but also digitizing the cash from an eventual perspective.

A lot of the addresses in India were not to the great level of structuring. So how do you then build out technology systems that understand those addresses and help in routing and more efficient deliveries and so on and so forth? So India-specific or India-first technologies that understand India's address nuance. We've built out a lot of consumer-facing products as well. As a consumer, you would have experienced what we call buyback where you can exchange your old phone for a new one and get a price off from Amazon. We built out a hand-to-hand exchange where you can exchange a product whether it's a size mismatch or any other issue with a different product or a replacement product. So a lot of these inventions in India were born out of the need that we had for the market, but the central tenet remained the same, we want to be able to serve customers and in order to serve customers we would have to build market-relevant solutions and invest in them. So, I don't really see them as challenges that have to be overcome, I see them as marketer solutions to be able to offer customers what we wanted to offer. 

5. Have there been any region-specific strategies implemented?

Back then, when we started customers across weren’t familiar with online shopping, especially in Tier 2 & 3 cities, where not everyone had smartphones or fast internet. So, we launched a lightweight app for customers to enjoy shopping on even low-cost smartphones and patchy networks. Customers also wanted the flexibility to shop in a language they were comfortable with. So, we introduced Amazon.in in Hindi in 2018 and subsequently in 6 more regional languages. 
Customers in rural and semi-urban India faced friction points like internet know-how, online payments, etc. So, we introduced assisted shopping to help hundreds of thousands of new to e-commerce customers shop online with Amazon Easy stores across the country. Over 2M customers shopped on Amazon with assisted shopping. We were the first ones to launch a seller mobile app. Today over 60% of our sellers use this app to manage their business.

From a customer selection perspective, there are preferences that are at a state level. From a seller-based perspective, there are sellers who are, in some areas, they have certain unique selections. But those are issues we've solved for with our vast transportation and fulfillment network. These are just a few examples of the region-specific strategies implemented by Amazon India. We have consistently adapted the offerings and services to cater to the unique needs and preferences of Indian customers, aiming to provide a seamless and enjoyable shopping experience throughout the year 

6. In what ways has technology played a crucial role in all aspects of Amazon's Operations network? Could you elaborate on the investments made in technology, logistics, and infrastructure to enhance customer deliveries?

In line with our efforts to continuously elevate the experience for our teams, we have leveraged cutting-edge technology to optimize the processes and functions across all Fulfillment Centers (FCs). The technological innovations assist FC associates in various stages, ranging from ‘random stow and pick’ to ‘box-sizing algorithms’, software that determines the shortest, most efficient walking route from one place to another, and the SLAM process (Scan, Label, Apply, Manifest).

We have invested in technology & innovation in this network with the introduction of Sort Slides & Auto Sorters. This automated and expanded network helps increase the speed of transporting packages for customers and sellers in the country.  The investment in automation has helped us build over 30% efficiency in the sortation process. Technology that helps us connect inventory/orders to customers in a safe, efficient, and sustainable manner will become a key focus area in the near future.

To ensure reliable and timely deliveries, we continue to invest in technology, logistics and infrastructure. For our partners, we focus on building interface tools and technology that enhance customer experience. Customer address accuracy is one such example, which is the single most important customer input for Amazon to make fast and reliable deliveries to the customers. To address the challenge of delayed deliveries due to errors in addresses, we use Machine Learning techniques to validate customers’ addresses, compute address quality scores, correct city-pin code mismatches, and provide suggestions to users to correct wrong addresses. 

We also use our own technology platform like GPS for vehicle execution and monitoring. It is used in every vehicle which transports goods, enabling us to get in-depth details on various parameters and track the movement of the packages. Implementation of GPS also helps in sending a replacement vehicle and repairing the vehicle quickly to the location in case of a vehicle breakdown. Amazon also provides access to technology platforms to its partners, which helps them review their schedules, plan vehicles for routes, and communicate seamlessly with Amazon. 

7.    As Amazon celebrates 10 years in India, what key partnerships have been instrumental in supporting the company's commitment to the country?

Indian Railways: We started our partnership with Indian Railways in 2019 and have worked with the Indian Railways team to scale the volumes moved through the Rail network. Our partnership with Railways has been very strong and we have been able to build new e-commerce-related capabilities with the team. In fact, we were the first e-commerce player to offer 1-day deliveries (critical for our customers) through the Rail network.

Amazon Air: At the start of this year, we announced the launch of Amazon Air in India which allows us to transport customer packages over longer distances in shorter time frames. As part of the “middle mile” of our transportation network, think of our air cargo network as the connective tissue between our upstream volume, which is packaged at our fulfillment centers, and our downstream delivery network. From road to railways to air to water – we have ensured to utilize every possible mode of transport to ensure we are able to reach customers irrespective of where they reside.

Additionally, we also collaborated with third-party delivery providers, such as the Indian Postal Services, to further enhance our delivery capabilities.

Partnering with OEMs: Amazon India has collaborated with Sun Mobility, Mahindra Electric, Hero Electric, EVage with some sustainable startups to expand its delivery fleet with more electric vehicles (EV).  Building a fleet of electric vehicles that ensure sustainable and safe deliveries of customer orders:

At Amazon, we are committed to building a supply chain that will minimize the environmental impact of our operations. As part of the Climate Pledge, Amazon India has committed to including 10,000 electric vehicles in its delivery fleet by 2025. The company continues to work with several OEMs to build a fleet of ‘Made in India’ electric vehicles that ensure sustainable and safe deliveries of customer orders.

8. How has Amazon's presence in India created work and entrepreneurship opportunities? 

Today, we deliver to all 100% serviceable pin codes across the country, with more than 97% of pin codes now being able to receive their deliveries within 2 days of placing an order.  As Amazon India strengthens its infrastructure footprints across the country, it also provides entrepreneurial opportunities to local kirana shops and small businesses. Our commitment in India is to create direct and indirect job opportunities. Throughout the years, we have focused on fostering a talent-led culture that is conducive to growth that facilitated our efforts to drive innovation to serve our customers better. We are also committed to providing women with equal access to work, growth opportunities, and resources that help them broaden their horizons. Building on our commitment to empowering individuals with work opportunities, we have implemented various programs to ensure seamless and efficient last-mile delivery to customers. These programs include the Delivery Service Partner (DSP), I Have Space (IHS), and Amazon Flex. The DSP program provides full-time roles for delivery associates, while the IHS and Amazon Flex programs offer flexible work opportunities for individuals to earn supplemental and part-time income. These initiatives contribute to improving the delivery experience for customers and help Amazon fulfill its delivery promises. 

The presence of several all-women delivery stations complements our efforts to increase the opportunities for women in the logistics sector whilst strengthening our Diversity, Equity, and Inclusivity (DE&I) commitment. We have seven all-women delivery stations operated by partners, one each in Tamil Nadu, Gujarat, and Mizoram and two in Kerala and Andhra Pradesh. As Amazon India continues to expand its reach in the country, the women working at these all-women partner delivery stations will serve as an inspiration to many more.

9. Can you provide details about the last-mile programs designed for small businesses and entrepreneurs?

Over the last decade, we have invested significantly in developing our infrastructure so that Amazon can deliver what customers want safely and on time, every single time. There are 4 key ways in which Amazon has transformed the e-commerce landscape as part of both middle and last-mile operations. 

• Delivery Service Partners (DSP) We launched EDSP program in India where Amazon partners with over 300 Small and Mid-sized Businesses (SMBs) to deliver packages to Amazon customers. The DSP program has not only helped Amazon India expand its reach in the hinterlands of the country but has also provided growth avenues for SMBs. Today we have close to 2000 delivery stations both owned and operated by Amazon, as well as Delivery Service Partners in more than 750 cities.

• Amazon Flex: We launched Amazon Flex, a program under which we work with thousands of delivery partners in 65 cities, program provides innovative opportunities for individuals to create their own schedule and earn an income by delivering packages to customers during their spare time. The program has been designed for individuals whose commitments do not suit the patterns of traditional work. This could include housewives, students, or others, who can work part-time, choose their own schedule, supplement their existing income, and work around family or personal commitments.

• I Have Space: From our learnings and insight—that almost every neighborhood in India has a small store or business and the owners know almost everyone in the vicinity. This was already a well-developed ecosystem. This insight led the team to start piloting an alternate delivery method in 2015 to ensure customer delivery expectations were not compromised. Amazon tapped into local businesses, with a strong understanding of the complex roadways to assist with deliveries, expanding the delivery network without a fixed full-time commitment to each partner. The program proved successful for Amazon, customers, and ultimately the local stores and businesses, who were able to treat this as a side hustle to receive additional income in their free time. The program went from beta to a core delivery method, now known in India as ‘I Have Space’. An India First Program, ‘I Have Space’ model has since been replicated in various settings globally. Today, the program has more than 28,000 neighbourhoods and Kirana partners in close to 420 towns and cities across its network in India.

• Trucking Partners: in our middle mile operations we have grown from a few trucking partners in 2019 to more than 500 trucking partners in 2023, who are now associated with Amazon India to ensure on-time supplies, reliable and safe delivery, and a great customer experience across the country.

10. How has Amazon India's Operations network contributed to job creation and economic growth in the country over the past decade?

As we strengthened our infrastructure network across the country, it also provided work opportunities to locals from all walks of life. We have remained steadfast in our resolve to ensure that we continue to develop a balanced workforce by empowering individuals and providing them opportunities to invest on behalf of our customers. Our infrastructure growth has resulted in the growth of ancillary businesses and also the growth of indirect job opportunities through our partners across India. We are thrilled about how our journey in India has allowed us to be a part of the India growth story in a meaningful way. From building tech and infrastructure for Indian businesses to be a part of the digital economy and modern retail, growing the digital payments framework, and helping create global brands from India and in the process digitizing millions of small businesses and creating direct and indirect jobs in the economy. 

11. How does Amazon ensure the sustainability and environmental impact of its Operations network in India, especially in terms of packaging, waste management, and carbon footprint reduction?

We are committed to using our size and scale to address the urgency of climate change – and it's why Amazon co-founded The Climate Pledge, becoming the first signatory and setting a goal to meet the Paris Agreement 10 years early and becoming net-zero carbon by 2040. We continue to invest in sustainability across our businesses to drive down our carbon emissions and environmental impact. We have a single-minded mission to run 100% of our operations on renewable energy and are working relentlessly to reach our goal by 2025—five years ahead of our original target of 2030. Our commitment to protecting the planet and limiting our impact on the environment has led us to remain the world's largest corporate buyer of renewable energy. 

In 2022 alone, we announced six utility-scale renewable energy projects in India, representing more than 920MW of renewable energy capacity. We also announced 23 new solar rooftop projects at our India fulfillment centres across 14 cities last year. We announced in 2020 that we will be adding 10,000 EVs to our local delivery fleet by 2025 and have partnered with key industry players to implement electric vehicles (EVs) in our delivery fleet. From reducing packaging to increasing the use of materials that can be easily recycled, we are continually innovating how orders are shipped for the good of customers and the planet. In India, we have eliminated the use of single-use, thin film plastics in packaging originating from our fulfillment centres in 2020. The same year, we also introduced 100% biodegradable paper tape to seal and secure outbound customer shipments. We’re happy to share that we have expanded our packaging-free shipping initiative to more than 400 cities across the country.

However, we acknowledge that there is a long way to go, and more needs to be done. We remain steadfast in our commitment to building a sustainable future for all and will continue to take bold actions that drive positive change.

12. Automation has been a talking point for the e-commerce industry. What changes is Amazon bringing to India in this regard?

We see automation as a force multiplier or an enabler to make the lives of associates more convenient in the operations network. The investment in automation has helped us build over 30% efficiency in the sortation process. Technology that helps us connect inventory/orders to customers in a safe, efficient, and sustainable manner will continue to be a key focus area in the near future. We will continue to invest in technology, logistics, and infrastructure to enhance the work experience for our people and to ensure that they have the right kind of support to deliver to customers. Going forward automation will also help in handling deliveries with a lot more precision by improving address and route quality. Automation is surely an enabler but our business is human-centric and that won’t change. 

13. Drones have always excited me and it definitely has shown a promising start in countries like US. Why hasn’t India adopted this tech yet? 

We’re working around the world to bring drone delivery to Amazon customers everywhere. I don’t have any specifics to share at this stage.

14. Looking ahead, what are the key priorities and future plans for Amazon India's Operations network as it enters the next decade of operations?

We will continue to remain focused on delighting our customers and partners while positively contributing to India’s growth story. With the increase in digital penetration across tier 3,4 cities, e-commerce growth is now visible across all cities, towns, and villages. We all witnessed the significant tailwind during COVID in the e-commerce space and saw the increase in both horizontal and vertical marketplaces. That said, have to realize that e-commerce is still in the early stages in India and the increase in the number of companies in e-commerce is serving as a key headwind in developing the broader e-commerce ecosystem – we have seen growth in warehousing and logistics infrastructure, payments infrastructure, last-mile delivery space, and others. We are ten years into our journey, but as we say at Amazon, it's still Day 1. In our first ten years, we democratized e-commerce – making it a daily phenomenon for everyone to participate in, from any part of the country, to buy anything they needed and not just for expensive phones or TVs (though we sell a lot of those too). 

We are further committed to empowering small businesses and Kirana stores via partnerships in our last-mile operations, and we will continue to strengthen our fulfillment network to ensure ever faster and more reliable deliveries across India.

As the way forward, our aim is to use technology and consumer insights to further enhance our customer fulfillment network. 

E-commerce has the potential to supercharge the economic development of the country on a massive scale as its key levers are perfectly aligned with economic priorities. There is a lot of innovation ahead of us and the pace of innovation will be faster than what we have seen so far.