Amazon opens 15 warehouses for AmazonNow in 4 cities

Amazon has added 15 new fulfillment centres to create a specialised network for its Amazon Now hyperlocal grocery delivery business, as it looks to offer perishables which is expected to be in sync with its plans for food retail in the country.
 
The new centres are based in the four cities where Amazon Now is currently available—Bengaluru, Delhi, Mumbai, Hyderabad — helping it take on players like BigBasket and Grofers.
 
Amazon’s overall warehousing capacity has now increased to 56 fulfilment centres (FCs) across 13 states with a total storage space of 13.5 million cubic feet, much ahead of Flipkart’s.
 
Amazon Now alone will have 120,000 cubic feet of storage space. These new FCs will have temperature-controlled zones, a first for Amazon in India, to store and deliver perishable products such as fruits and vegetables, dairy products, and frozen products.
 
For a customer, the Amazon Now app will now offer a wider range of fruits and vegetables and dairy products. Hitherto, Amazon would tie up with stores such as HyperCity to deliver these items since it did not have temperature-controlled storage.
 
With the new infrastructure capability, Amazon Now will have a range of 5,000 consumables, apart from curated items across beauty, kitchen and home items, and even smartphones. "With the launch of this specialised network of 15 fulfillment centres specifically for daily essentials, we strongly believe that we will be able to better serve our customers in key metros." said Akhil Saxena, VP for customer fulfillment at Amazon India.
 
The move comes as Amazon is rolling out its food retailing business in India. Amazon Retail, the entity which will sell the food products, will likely be a seller on Amazon Now, like it is already on Amazon.in.
 
ET had reported earlier this month that Amazon had already begun a pilot in Pune for its food retail business. An Amazon spokesperson said there is expected to be a synergy between the two businesses, but did not offer clarity.
 
The move of adding dedicated fulfillment centres also reflects Amazon’s focus on the grocery segment.
 
"Hyperlocal is a difficult business, and margins are low. Adding FCs could be Amazon’s strategy to keep control on stock and improve margins," said Satish Meena, senior forecast analyst at Forrester.
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