Supply Chain Management of Amazon India
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Amazon launched in India in 2013 and has since established itself as the second largest online retailer in the country. It utilizes a hybrid logistics model, delivering some products itself while leveraging other logistics firms. Amazon's supply chain in India includes 21 fulfillment centers across 10 states that house over 1.3 million products. It aims to win in India by expanding to tier 2/3 cities, where 65% of orders originate, and developing innovative programs like mobile carts and studios to help small businesses sell online. To further penetrate the Indian market, experts suggest Amazon could adopt a multiple hub and spoke model and invest more in developing an in-house logistics arm.
Supply Chain Management of Amazon India
- 1. SUPPLY CHAIN MANAGEMENT OF AMAZON INDIA Presentation By: Abhisek Khatua
- 2. Introduction • Amazon Incorporated as “Cadabra”, By Jeff Bezos.July 5, 1994 • Website went Online as Amazon.com; Online Book Store1995 • Acquired Junglee.com1998 • Entered Indian E-commerce space as Junglee.com2012 • Amazon.in launched2013 @Data Source: Amazon Corporate Website
- 3. Total E-Commerce Size ($ Billion) Online Shoppers of Total Internet Users (as a %) Average Spending per Online Shopper in India Investment Over $5 Billion India: The Big Opportunity for Amazon @Data Source: “e-Commerce in India: A Game Changer for the Economy”, CII, April 2016
- 4. Amazon Invades India o B2C e-Commerce Market place; 2nd largest Online Retailer in India. o 55 million products across hundreds of categories. o 1.3 Million Products in Fulfillment Center (26 FC in 10 States). • Massive Selection • Low Prices • Fast & Reliable Delivery • Trusted & Convenient Experience • Convenient Payment (Cash, Electronic) Customers Sellers • World Class e-commerce platform • Large Base of Customers • Fast & Stress free shipping • No Fixed Cost • Secure & Timely Payment • Professional Services
- 5. Amazon India: Products, Services and Value Chain Kindle e-Readers & eBooks Computers & Accessories Sports, Fitness & Outdoors Handbags & Luggage Amazon Apps Cameras, Audio & Video Beauty, Health & Gourmet Books Shoes Clothing & Accessories Movies, Music & Video Games Home, Kitchen & Pets Jewellery, Watches & Eyewear Car, Motorbike & Industrial Mobiles & Tablets Toys & Baby Products Sell on Amazon Fulfilment by Amazon Pay with Amazon (Easy Ship) Sponsored Product Amazon Global Selling Products Services Value Chain @Data Source: Amazon India Corporate Website, Store Directory
- 6. Unveiling Supply Chain of Amazon India With respect to their different services
- 7. Selling on Amazon (Sell Smart. Sell on Amazon.) Set up Store on Amazon Receive orders from Customers Amazon delivers Orders Receive payment from Amazon Help to Grow Business Expand Globally Amazon Easy Ship Fulfillment By Amazon @Data Source: Amazon India Corporate Website
- 8. How Amazon help to grow Sellers’ business? Set up your store Sit back and relax Hassle-free Payments Sell Globally Crores of customers across the world Fast and Stress free Shipping No fixed costs. Pay when you sell. Secure and Timely Payments Professional services Advantages
- 9. Fulfillment By Amazon (FBA) 1. Sellers send products to an Amazon fulfillment center or schedule a pickup 2. Amazon stores Sellers’ products – from a single unit to your entire inventory 3. Customers order Sellers’ products from Amazon, often with fast, free delivery 4. Amazon packs and ships Seller’s products from fulfillment center to the customer 5. Amazon’s customer service and delivery creates loyal, happy customers @Data Source: Amazon India Corporate Website
- 10. Fulfillment By Amazon (FBA) Seller Customer INFORMATION INFORMATION PRODUCT PRODUCT FC
- 11. Advantages of FBA- “You sell it, we ship it.” Focus on your business Build Trust Pay as you go Customers keep coming back for more Cash on delivery payments Amazon Prime
- 12. Amazon Easy Ship 1. Customer orders from Sellers using Pay with Amazon. Sellers get a notification of the order via email, Seller Central. 2. Sellers schedule the pickup and keep the product packaged and ready. 3. Amazon Easy Ship delivery associate picks up the package from Sellers’ doorstep. 4. Amazon Easy Ship delivers the package to the customer and picks up Cash on Delivery (COD) payments. @Data Source: Amazon India Corporate Website
- 13. Amazon Easy Ship Seller Customer INFORMATION INFORMATION PRODUCT PRODUCT
- 14. Amazon Global Selling Expand business to the US and other International Market Showcase products to millions of customers Increase sales by tapping into the US & International holiday season Selling on Amazon & Fulfillment by Amazon Customers order Seller’s products on Amazon.com Sellers can either choose to fulfil those orders on their own or use Fulfilment by Amazon (FBA). Fulfil orders on their own: sellers will fulfil orders from India when a customer buys sellers’ products on Amazon.com FBA: sellers store their products in Amazon's fulfilment centres, and Amazon will pick, pack, ship, and provide customer service for these products. @Data Source: Amazon India Corporate Website
- 16. Strategic Partners of Amazon Amazon will use P&G’s warehouses for faster and economical product distribution. Amazon will use Future Group’s strong product knowledge, extensive brand portfolio and sourcing base. Amazon will use SBI’s smooth & trusted payment solutions for small businesses and end customers
- 17. Fulfillment Centers of Amazon Fulfillment Center: 21 New Fulfillment Center: 5 Delivery Station: 4 Largest FC in Sonipat, Haryana Space: 200000 Sq. Ft. Capacity: 800000 Cu. Ft. Year end 2016: Combined Storage Capacity 7.5 Million Cu. Ft. 86% Sellers of FBA 1.3 Million Products are available for Immediate Shipping @Data Source: MWPVL International
- 18. FC, New FC and Delivery Station of Amazon @Data Source: MWPVL International
- 19. Evaluation of Amazon India’s Supply Chain • Delivers some of the products itself, while delivering some products sold by suppliers on its marketplace using other logistics firms. Hybrid Logistics Model • “Innovating to get customers what they want, when they want it.” • Using machine learning, data analytics, and complex simulations. Amazon SCOT (Supply Chain Optimization Technology) • Seller is free to choose self-fulfilment or marketplace-fulfilment. • Infused inventory-led in a marketplace by having operational control over seller entities like Cloudtail (Amazon). Managed Marketplace Model
- 20. The Game Plan of Amazon India: Wining India • 65 % Orders (2015) are from Tier II & III cities • Engaged in Pilot Project of Rural Delivery Network in Tier III & IV cities with Connect India E-Commerce Pvt. Ltd. (of Basix Group)
- 21. Amazon India: Wining India • Three-wheeled mobile carts to navigate in a city’s business districts, serve tea, water, and lemon juice to small business owners and teach them about selling online. • Team travelled 15,280 km across 31 cities, served 37,200 cups of tea, engaged with over 10,000 sellers (in 4 Months) Amazon Chai Cart • A studio-on-wheels offering a suite of launch services. • Enables small businesses to get online in less than 60 minutes. Amazon Tatkal • Deliver products in over 19,000 pin codes using Amazon Transportation Services, Blue Dart, and India Post. • Most penetrated e-commerce platform in the country. Easy Ship
- 22. Our Suggestion • Customer Consideration, Vendor Consideration, Geo-Political Consideration, Logistics Consideration. Multiple Hub & Spoke Model • Better control, Business Diversification. • Improved Delivery, Cost and Services. A fully grown in-house logistic arm • Tie up with Home-Grown Logistics Firm & Start-Ups. More Investment in Supply Chain to penetrate Rural India
- 23. Conclusion “Be afraid of Our Customers, because those are the folks who have the money. Our Competitors are never going to send us money” …… Jeff Bezos Supply Chain of Amazon India Ready with EVERYTHING EVERYWHERE EVERYTIME
- 24. Thank You