Logistics plays a very important role in any ecommerce ecosystem and none would know this better than Amazon having its operations in several countries. In India, it has floated its own logistics arm, Amazon Transportation Services and invested in excess of Rs 675 crore in it. A fresh tranche of Rs 122 crore more has now been invested in Amazon Transportation Services, as per a Times Of India report.
These funds have been inducted through two entities, Amazon Corporate Holdings as well as Amazon.com. It is understood this transaction took place in October 2018.
As mentioned, logistics for any ecommerce firm is a huge challenge and for a vast country like India taking goods from one end to another and then making sure the deliveries are made within the fastest period can be testing, to say the least. And then the cost of the operation vis-à-vis the order value is another factor that requires to be watched very closely. This is one reason why companies like Amazon, which can afford, float their own logistics venture to handle deliveries of orders on their platforms. At least, it keeps the overall outflow on account of last mile deliveries under control.
Aiding the smooth operations of the logistics component within the end-to-end transaction involving the placement of order and its execution are the fulfilment centres established and managed by Amazon across the country. There are 50 such facilities in the country. This helps Amazon keep its promise of delivering goods ordered by the Amazon prime customers the very next day. This is a big attraction among the customers and may be one major reason for the success of the Amazon Prime membership scheme, the video streaming service being seen as a bonus.
However, there has been no official confirmation on this investment in the logistics venture by Amazon.