Amazon may export delivery lessons from India to cut costs abroad

Thu Nov 12, 2015 5:07pm EST
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By Aditi Shah

BENGALURU, India (Reuters) - E-commerce giant (AMZN.O: Quote) is taking lessons learnt from its daily battles with India's choked roads and cramped cities to some of its largest developed markets, exporting a model of cheaper deliveries and reduced warehousing costs.

Online shopping is booming in India, where millions of consumers are newly able to access the Internet thanks to cheap smartphones. For Amazon, it is already the largest contributor of new customers outside the United States.

But, like local rivals Flipkart and Snapdeal, Amazon has struggled with deliveries in cities where snarl-ups are frequent and road signs unreliable. In response, firms have set up logistics networks and use motorbikes instead of trucks.

Flipkart, for one, has tapped Mumbai's dabbawalas, a more than a century-old lunch box distribution service.

More than two years on from its arrival in India, Amazon says it is now ready to apply some of the innovations applied here to markets including the United States, Mexico and Brazil.

Britain, for example, could get a delivery service called Easy Ship, where orders are picked up by Amazon's crew directly from sellers, cutting out the time and cost of sending goods to a warehouse and the need for more space.

"It's not just that we learn from the big brothers like North America," Akhil Saxena, director of operations at Amazon India said in a recent interview at the company's local headquarters in the southern city of Bengaluru.

"There is so much focus on India and the kind of growth that is happening here... People say, if it works for them, let's see what we can pick and learn," said Saxena.   Continued...

Security guards stand at the reception desk of the Amazon India office in Bengaluru, India, August 14, 2015. REUTERS/Abhishek N. Chinnappa