Amazon, Flipkart lease warehouse space to meet festive season demand

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As the festive season approaches, the e-commerce players are making constant efforts in order to handle the anticipated up-rise of demand. The coronavirus scare has compelled people to avoid the brick and mortar model and instead shop from the comfort and safety of their homes. In light of the same, the two e-commerce giants Amazon and Flipkart are in talks with several warehouse operators across the nation to lease their space temporarily.

Both the giants are expecting their sales to outrun their existing fulfilment centres and are thus looking for incremental storage areas for the next few months until they develop their own facilities.

Also Read: E-commerce players amplify warehousing operations ahead of festive season

As per sources, Amazon has already taken about 3 lakh square feet of space at National Highway 8 in Gurugram for a few months and is in talks with others to lease more, while Flipkart is also holding negotiations with multiple buyers.

Last month, Amazon said it plans to set up 10 new fulfilment centres, gearing up to cater to a surge in demand for online buying usually only seen during the festive season.

Snapdeal too has launched eight new logistics centres to its network across manufacturing hubs, including Mathura, Noida and Mumbai.

This year, the outbreak of the virus has further escalated the surge of e-commerce as many offline retailers have shifted to online platforms.

The apparel industry has also reported over 20-25% contribution from online channels, more than doubling over the past six months.

The festive season, which starts with Navratri and continues until Christmas brings a good hype for businesses across the season. However, due to COVID, the companies started with profit-making a little late this year.  

Companies started their capacity addition in July-end and players including LG, Samsung and Panasonic saw their best August sales in the last five years.

“While demand is a key trigger, there is also a rush of small sellers moving into online marketplaces for the first time but don’t have their own warehousing,” said an industry official.

Source: ET

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