Amazon Air will enable faster deliveries in top metros: Logistics VP Akhil Saxena

Jan 24, 2023 India Shipping News

HYDERABAD : Amazon has partnered with Quikjet Cargo Airlines to launch Amazon Air which will initially look to deliver goods in cities like Bengaluru, Hyderabad, Delhi and Mumbai.

Amazon launches cargo flight Amazon Air in India to speed up deliveries

Amazon’s own cargo service in India will allow the US ecommerce behemoth to deliver more goods faster and in next-day delivery time slots to consumers, especially in top metro cities, a senior executive said.

Amazon will continue to move goods by air through third-party aircraft firms such as Indigo, Spicejet and Vistara, while Amazon Air will be dedicated to markets like Bengaluru, Hyderabad, New Delhi and Mumbai, said Akhil Saxena, Vice President – customer fulfilment (APAC, MENA & LATAM) and worldwide customer service –Amazon.

The launch of Amazon Air is another critical investment to strengthen Amazon’s delivery infrastructure in the country, according to Saxena and Sarah Rhoads, Vice President, Amazon Global Air.

It has over 50 fulfilment centres (FC) across more than 15 states.

“If earlier, I could take goods for air shipments, say by 7 pm, now I can extend it to 10 pm with a dedicated aircraft which will help in delivering goods from other FCs to you faster,” Saxena said, explaining how Amazon Air will cut down delivery timelines.

Rhoads added that faster delivery promises have a higher rate of conversion from consumers into actual orders as against abandoning the items in a cart over longer delivery slots.

For now, Amazon has leased two aircraft in India in partnership with Quikjet. In the United States, it has 90 aircraft for Amazon Air. Across the globe, this would be around 150 aircraft, including India.

“Essentially, this gives us more control on delivery and gives us full visibility end–to-end,” Saxena said, adding that faster delivery will make the shopping experience on Amazon better.

Besides air, Amazon uses railways and trucks to deliver goods across the country.

Saxena and Rhoads said Amazon Air’s debut in India will help its 1.1 million sellers reach more consumers as well.

A dedicated cargo fleet will also help Amazon in servicing more same-day and next day deliveries for its Prime users here.

Amazon Prime is a paid subscription programme that offers faster delivery, additional discounts to consumers along with access to its streaming platforms like Amazon Prime Video and Amazon Music.

Last week, ETtech reported that Amazon had infused an additional Rs 400 crore in its local shipping arm Amazon Transportation Services.

Prior to that, in June 2022, Amazon Transportation had received around Rs 375 crore from the parent entities of Amazon as well, ET reported.

Saxena confirmed that Amazon has now opened its in-house logistics infrastructure to third-party merchants and is experimenting with delivering non-Amazon orders.

ET first reported about this in November. Amazon’s rival Flipkart’s logistics arm Ekart has also begun servicing third-party orders from independent sellers, direct-to-consumer brands, and others.

No quick commerce

On whether Amazon was looking to service consumers in 10-30 minutes for grocery items, Saxena said it had no such plans.

“We looked at it and we found that customer experience was not the greatest with multiple delivery options. Today, it’s a great experience when you go to Fresh and you get all the selection you want and it also includes vegetables, fruits and other fresh produce,” he said.

In Bengaluru, Amazon also allows pick-up of Fresh orders through its chain of More retail stores where it is an investor along with Samara Capital.

Over the past 18 months, consumer internet firms like Zomato’s Blinkit, Zepto, Swiggy Instamart and Reliance Retail-backed Dunzo Daily have aggressively expanded the so-called ‘quick commerce’ service offering grocery and other essentials in under 30 minutes.

Indian quick commerce platforms are, however, finding it harder to acquire new users and scale it in a sustainable manner without burning a high amount of capital amid the ongoing liquidity squeeze for venture funding.

Air debuts amid changes

Amazon Transportation reported total revenue of Rs 4,581 crore in FY22, a 12.6% jump from the year-ago period. Net losses for the shipping services arm also widened by over 38% to Rs 95 crore in FY22 from a loss of Rs 68.7 crore in FY21.

Amazon runs its India business through multiple entities and Amazon Transportation is one of its key firms. For example, its India marketplace is run by Amazon Seller Services.

Amazon Air has arrived in India at a time when the ecommerce firm has been cutting jobs in India as well as globally.

Its Chief Executive Andy Jassy said that over 18,000 people would be laid off across its various businesses worldwide. In India, around 1,000 employees are being fired, as reported by ET.

Amazon has also shut down various businesses in the country, including its food delivery, edtech and wholesale distribution units.

“These were experiments. Food was present in Bengaluru only, while distribution was operating in three cities in Karnataka,” Saxena said on being asked about what these closures would mean for Amazon India.

Manish Tiwary, Amazon India’s country manager for its consumer business, echoed this in December and said the etailer would double down on investments in its business-to-business (B2B) marketplace, pharmacy, grocery and social commerce verticals in 2023. In April 2022, Amazon acquired social commerce startup Glowroad.

Source : ET