Amazon revamps its delivery service program

Amazon revamps its delivery service program
Photo Credit: Reuters
1 Sep, 2021

Ecommerce major Amazon India is doubling down on its efforts to onboard more entrepreneurs to strengthen its last-mile delivery network in the country via revamped global delivery service (DSP) program. 

Under the program, Amazon India will be offering newer services including allocating an account manager to delivery service partners, along with providing key technology and value-added tools for hiring, legal and tech support.  It also looks to negotiate competitive rates for its partners to provide asset insurance, compliance support and group corporate insurance for delivery partners.  

The US-based e-commerce major has already worked with close to 340 DSPs in India, which currently operate a delivery network across 750 cities and 1500 DSP stations. The program has helped Amazon also gain access to the remotest corners of the subcontinent including Ladakh, Nagaland and Andaman and Nicobar islands.  

According to the company, each delivery service partner employs between 40 -100 delivery agents on average.  

Globally, Amazon has invested close to $1 billion till date for the program and has close to 2500 partners across 11 countries of the United States, Canada, the United Kingdom, Germany, France, Italy, and Spain, the company said.   

“The current version is an extension to our existing program, as we want to ensure that more aspiring entrepreneurs start their delivery companies. We look to offer key technology and business tools to our delivery service partners so that they can focus on scaling the core operations of their business. We believe that these tools are important for forming a strong foundation for their business,” said Akhil Saxena, vice president – customer fulfilment, APAC, MENA and LATAM, Amazon in interaction with Mint. 

Saxena didn’t share the total corpus Amazon looks to invest to scale the offering in the country. To help with cash flows, Amazon will also reduce payout time to partners weekly, instead of monthly, he added.         

Amazon’s delivery service partner program was first launched in India in 2015 and allowed small individual entrepreneurs to set up their own logistics network, helping Amazon in last-mile deliveries and expansion of its logistics network in the country. Further, most of the orders till date serviced by these DSPs are led by Amazon’s marketplace.   

As a part of its revamped offering in India, it has already onboarded close to 40 partners, across various metros as well as Tier 2 cities.  

“Our geographical focus on the platform depends on where the entrepreneurs are coming from. However, we are targeting a mix of metros and tier 2 cities with this platform including Delhi NCR, Hyderabad, Mumbai and Bengaluru, to name a few. Since we want infrastructure costs to be low for partners, we don’t rely on deliveries from them for specialised categories like food and groceries,” said Saxena.   

To boost its last-mile logistics strength, Amazon also currently runs its ‘I have space’ program and Amazon Flex programs. Through ‘I have space’ the e-tailer allows local kiranas to make local deliveries in their neighbourhood. It has scaled this offering to 28000 kiranas at present.   

Amazon Flex allows individuals to join the program and use their own vehicle to deliver orders, in their free time.   

To cater to the growing demand of e-commerce deliveries, arch-rivals Flipkart and Amazon have also been ramping up their warehousing capabilities across states of Tamil Nadu and Telangana.    

E-commerce shipments in India are expected to grow to 12.3 billion by 2024 from 3.1 billion in 2020, according to estimates by management consultancy Redseer.  With the sudden spike in demand for online shopping, third-party logistics’ contribution to overall online deliveries grew by 22% in 2019 to 27% by 2020, Redseer data shows.