Amazon set to open logistics services to deliver third-party ecommerce orders

After Walmart-owned Flipkart, e-commerce major Amazon is set to open its logistics infrastructure in India for non-Amazon orders to various online businesses, making the US e-commerce major now a direct rival to new-age logistics firm Delhivery, Xpressbees, and Ecom Express.

Amazon’s vertical Called Amazon Shipping initiated to deliver non-Amazon orders has tapped into direct-to-consumer (D2C) brands, logistics aggregators, and other businesses that take direct orders from consumers.

“…Now you may ship orders received by you via your website or social media or any other means,” one of the emails sent by a senior Amazon executive on the matter said.

Adding it said that Amazon is covering over 14,000 PIN codes in India and using its ‘high service levels will lead to on-time performance eventually reducing ‘overall logistic cost and improved customer experience.’

Interestingly, one of the customers using the beta service said they are being billed for the service under Amazon Seller Services – which runs the India marketplace unit.

Amazon Transportation Services (ATS) is one of the key Indian entities of Amazon which houses the logistics business. The local shipping services arm of the US e-commerce giant reported total revenues of Rs 4,581 crore in FY22, a 12.6% jump from the year-ago period. Its losses increased by 38% to Rs 95 crore in FY22.

“The shipping rates being offered are similar to what an Amazon merchant will be given for the marketplace orders. Over the last few weeks, the outreach is more consistent from Amazon executives and this is being promoted actively,” one of the people mentioned above said.

This step from the e-commerce giant to enter into third-party e-commerce comes at a time when the industry has seen dynamic changes from traditional as well as new-age aggregators like Shiprocket and others, including M&A to offer full-stack services.

While aggregators like Shiprocket are also cornering market share from traditional players, Delhivery and Xpressbees have also launched D2C-focused next-day delivery services to tap into the growing volumes of such brands being bought across the country.

While the pilot is underway, Amazon is expected to make a formal announcement over the next couple of months in India. Industry executives and analysts said depending on how Amazon scales the service, it could have a wider impact on existing players.

“Amazon has perhaps the best technology (for logistics) and manpower for every pin code. It would be a lot easier for them to offer this shipping service. Brands, too, can tap into the Amazon network without having to list as a seller and not lose consumer data to the marketplace. They (Amazon) are superiorly placed to do this..but its impact on others will depend on how seriously they expand this here,” said Rajat Tuli, partner at Kearney, a consulting firm. “They might be able to offer it cheaper than others also.”

Globally, Amazon has launched the service in the UK while it has tested the same quietly in its home market–the US.

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