Amazon doubles down on investments in seller infrastructure

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Following Flipkart’s latest Rs.9,000 crore funding round and subsequent assimilation of eBay India, Amazon has announced that it will be doubling its investment on seller infrastructure this year to stay in the game by optimizing this vital part of its supply chain. Dominance in the e-commerce marketplace in India has proven to be a far tougher challenge than either Amazon or Flipkart anticipated, judging by the expensive battles being fought on the front to secure the upper hand, albeit temporarily.

Amazon, having crowned itself Earth’s most customer-centric company is now shifting the focus to the sellers on its platform and plans to establish a seller-friendly marketplace with higher investments in warehouses, fulfillment services, in-person support, etc. Amazon currently operates a total of 34 fulfillment centers across India, having added 7 in just the last year.

Gopal Pillai, Director and GM of Amazon India, says, “As of March, there has been 160% year-on-year growth in the seller network on Amazon India, with more than 1.75 lakh sellers. This has ensured that on an average, there are 1.8 lakh products for sale in the marketplace at any given time, compared with about 15,000-20,000 products in a brick-and-mortar supermarket.”

Amazon has also increased the commissions paid to sellers across most of its product categories.

On the other side of the battlefield, Flipkart has announced a massive onboarding campaign to hire over 1,700 employees across verticals to develop its business model. Having acquired eBay India, Flipkart has effectively expanded its scope of business far beyond projected growth models.

The heated head-to-head battle between these two giants in the e-commerce space has led to better deals for the end customer, marginally higher profits for sellers, and a lot of employment being generated across business processes for the country.

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