Distribution has long been the Achilles heel of the book publishing industry. Not anymore. Publishers and distributors take guard. Book distribution and retailing is changing fast in India, with online retailers Amazon, Flipkart, Snapdeal, Infibeam, eBay and many others being the harbingers of change. Indian Printer and Publisher’s Sandip Sen talked to Samir Kumar, director category management at Amazon India to know more about the agility and speed of the retail behemoth that is rapidly introducing new initiatives each month to ramp up its position and presence in India.
After testing the waters for about a year with its acquisition of Junglee, Amazon commenced its Indian operations in June 2013 with just two product categories — books and movies. By this time dozens of online shopping sites had already entrenched themselves in India. Now after a year of operations, Amazon has 15 million products in 25 categories — of these, over 240,000 popular products are on its store shelves ready for same day delivery.
Growing distribution muscle
The key behind this amazing ramp up is a multi-pronged strategy designed to wipe out the structural weakness of the Indian retail and distribution system. It is an integrated mix of state-of-the- art warehousing and selling technology, high investment, long- term collaborative vision and the experience of being the world’s largest retailer with tried and tested solutions for different geographies and legal systems. Six months ago Amazon commissioned its first Fulfillment Centre (FC) in Bhiwandi near Mumbai with a warehousing capacity of 150,000 square feet. In May it commissioned the second FC near Bengaluru and several more are on the anvil.
Each Indian FC costs Amazon more than a half a million US dollars say independent analysts. Amazon has more than 110 such FCs worldwide and is still expanding at a breakneck speed. Each FC is a massive multi-level software-enabled storehouse that houses millions of articles from books to CDs, home theatres to garments,
toys to gadgets and thousands of retail goods on a random basis. The software locates the goods and provides not only state-of-the-art pick and place, retrieval and sequencing techniques within the warehouse but also co- ordinates collection from thousands of retailers each minute and sales to million of customers.
Complex logistics involve handling of air, ship, train and truck cargo, checking of goods, issuing receipts, picking up consignments from stores or vendors, packing, shipping labels, sorting to the outgoing locations and moving it to the despatch vehicle. The system also handles customer returns and sends them back to the retailer for possible replacement.
Varying service options
Amazon India gives options to both customers as well as sellers with total technology support, fulfilment by Amazon (FBA), warehousing support or easy ship support. With FBA, sellers store their products in Amazon’s warehouse and Amazon packs and delivers the orders to customers, provides customer service and handles returns.
However, sellers need not use Amazon’s warehousing and can use only its Easy Ship services. With Amazon Easy Ship, after order confirmation, sellers pick and pack the shipment at their own godowns, confirm to Amazon that they are ready to ship and Amazon collects the
shipment and ensures that the
product is delivered to the customer. Sellers benefit from low shipping rates, cash on delivery (COD) and pre- paid orders, scheduled pickups, faster delivery and automated shipment tracking. Customers get trackable shipments, COD and pre-paid orders with predictable and short delivery time and the Amazon guarantee.
New collaborative vision
With Alibaba’s successful listing, Amazon is readying itself for challenges from emerging economies such as India’s home grown online retailers like Flipkart, Myntra, Jabong, Snapdeal, Homeshop 18 and many others. It is rapidly recreating solutions to catch up with the nimble Indian startups. “We are continually innovating to find solutions that enhance the convenience and experience for our customers on Amazon.in,” says Samir Kumar. “Towards that we are running a pilot in- store pick up service in Bengaluru. We have identified and trained the staff at small kiosks and stores (read kirana shops), run by individual entrepreneurs, to be our shipment pick- up points. Depending on the results, we will take a call on how and what we want
to roll out and we will make an announcement on this at an appropriate time.”
With last mile deliveries still a problem in India especially in small towns and the rural hinterland with un- numbered houses and streets, the local kirana shop is a reliable way to ensure last mile delivery. Amazon’s partnership with small retail shows its business and political acumen in making it look more small business friendly than it is generally perceived to be.
Amazon India’s small business or SMB accelerator programme assists small sellers who want to get online but do not yet have the know-how or skill sets. It helps SMBs by training them on how to use a digital platform for creating digital catalogs and on managing and fulfilling orders. This unique bouquet of seller services makes Amazon India an online marketplace offering a suite of services that address distinct seller needs, helping them create profitable and scalable online businesses.
Indian language books
With Amazon for over 15 years, Kumar says that in India the Amazon
marketplace model co-opts the publisher, distributor or the retailer into its famed distribution chain.
Amazon has made a small beginning in Indian language books by introducing 23,000 Hindi titles in May 2014. “We will soon launch a selection of books in other regional languages including Tamil, Telugu, Malayalam, Kannada, Bengali and Marathi. We hope our efforts at enabling easy access to regional language books will go a long way in attracting more readers to these books.”
If Amazon is able to successfully distribute in the Indian language book market, it would have achieved what most multinational publishers like Penguin and Harper have failed to do with the Hindi imprints. The key to success will be involving popular Indian language publishers who face distribution bottlenecks and use traditional channels to market.
These are family-run businesses that are now going through a generational change — with the increasingly tech savvy younger lot now entering the core business a good bet for Amazon to leverage.
