Tezzbuzz Desk: Amazon Now is preparing to rapidly expand its quick-commerce business in India. The company plans to extend Amazon Now service to more than 300 cities. Under this expansion, Tier-2 and Tier-3 cities like Bhopal, Indore, Lucknow and Jaipur are also being included. The special thing is that instead of building new dark stores on a large scale in small cities, the company will use the existing More Retail stores to fulfill online orders.
The company is working on an asset-light model to expand Amazon Now. Under this, the existing stores of More Retail will be used as fulfillment points to fulfill online orders. This means that not only will customers be able to shop normally at these stores, online orders coming through Amazon Now will also be prepared and sent for delivery from here. According to Nishant Sardana, Director of Amazon Now, in small cities the company will use the existing stores of More Retail almost like fulfillment centres. Currently this model is live in 35 cities. About 75-80 percent of Amazon Now fulfillment points in these cities are already existing More Retail stores. This model is already being used in cities like Warangal, Karimnagar, Tirupati, Guntur, Amritsar, Kochi, Manipal, Bhubaneswar and Tiruvannamalai. The remaining fulfillment points are being operated through micro fulfillment centers and dark stores.
The focus of quick-commerce companies in India is now increasing on big metros as well as small cities. However, it is not easy to expand this business in Tier-2 and Tier-3 cities. Here the number of orders may be low, the average purchase may be small and the cost of delivery may be relatively high. Despite this, there is a steady increase in orders on Amazon Now. According to the company, in the last few months, Amazon Now orders have increased at the rate of about 20-25 percent every month. The company says that orders are doubling every quarter. However, Amazon has not yet shared the data to total order number or gross merchandise value i.e. GMV.
Amazon India had announced plans to expand Amazon Now to more than 300 cities in June. For this, the company is working on a plan to create more than 1,000 micro fulfillment centers and more than 100 large urban fulfillment centers. Currently, Amazon Now has more than 600 micro fulfillment centers. The company is adding about two new centers every day. At the same time, large urban fulfillment centers will be able to stock about four times more products than the existing Amazon Now centers. The company expects that Amazon Now's reach will cross the 300 city mark in the coming few quarters. Along with this, the fulfillment network will be further thickened in the existing cities also. By using More Retail's existing stores, Amazon is trying to expand its quick-commerce reach at lower costs and faster delivery to customers in smaller cities.
