Amazon’s Logistics Arm To Compete With Established Brands

Amazon India’s logistics arm, Amazon Transportation Services (ATS) is planning to extend its logistics services to sellers in India including those involved in online distribution. ATS has recently hired executives from leading courier companies to be able to create an independent logistic service that will compete with Flipkart’s Ekart, Blue Dart and FedEx.

Amazon has started with its own sellers but eventually, the company will offer logistic services to other brands and businesses. Until now, ATS services can only be availed under the Fulfilled by Amazon (FBA) scheme that allows sellers to store their inventory in Amazon warehouses all over the country. With the help of competitive pricing which is reported as definitely lower than third-party couriers, Amazon India hopes to attract more sellers.

According to a source, Amazon wants control over each and every segment of the ecommerce value chain ever since they started selling packaging materials for online shipments. Recently, it has also been reported that Amazon India is on the process of updating shipping costs for sellers that use ATS for delivery of out-of-state orders. The new charges which became effective last August 8 are applicable under the FBA scheme. Vendors offering products to consumers in the region will enjoy a drop in shipment costs and out-of-state deliveries.

Amazon has hopes of entering the on-demand food delivery market where it will be competing against established brands like Swiggy. In order to strengthen the logistics arm, Amazon has invested $32 million into Amazon Transportation Services that is facing heavy competition from Flipkart, Snapdeal and Paytm.

Meanwhile the Minster of State for Rural Development Ram Kripal Yadav said that the Indian logistics sector is prepared to grow to a $307 billion industry by 2020. Ecommerce logistics accounts will have a major share in the logistics market because of the increasing popularity of online shopping.

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