Amazon setting up first ‘fulfilment centre' in India

San Francisco: Amazon.com is setting up its first "fulfilment centre" in India as the world's largest internet retailer tries to break into the world's second most-populous nation.

Fulfilment centres are giant warehouses that help Amazon and other online retailers store many products, ship them and handle returns quickly.

The fulfilment centre is based in Mumbai, the biggest city in the country, according to job listings on Amazon's India careers website.

Amazon "has an immediate opening for an IT Manager in our first Fulfilment Centre based out in Mumbai, India," one recent listing said.

Another recent Amazon job posting sought a "Stations Operations Manager" to work for the fulfilment centre team in Mumbai.

Amazon was also recently looking for a financial analyst in Mumbai to report to a general manager and controller and help the fulfilment centre operate more efficiently and predictably.

Amazon spent heavily last year setting up more than 10 new fulfilment centres in the United States. The company also lists fulfilment centres in China, Germany, Japan and the UK on its website, but currently lists none in India.

Fulfilment centres cost a lot to set up, so Amazon's efforts to start one in India signal the company is serious about getting into the country's $550 billion (Dh2 trillion) retail market.

Expansion

"While it has been speculated that Amazon would be expanding internationally, it seems that the international expansion plans have been accelerating," said Ben Schachter, an analyst at Macquarie. "Last year, they launched a country-specific site in Spain and now it looks like India could be next."

An Amazon spokeswoman did not respond to emails seeking comment on the company's plans for India.

Amazon has software development centres in Begaluru, Chennai and Hyderabad and a customer-service centre in Hyderabad.

Shoppers in India can also buy products from Amazon websites in other countries and have the items shipped to them. But the company does not have a dedicated online retail business in India yet.

That has allowed e-commerce start-ups, led by Flipkart, to expand quickly in India.

"India is a tremendously large potential market for Amazon," said Mahesh Murthy, a venture capital investor in India and founder of digital marketing start-up Pinstorm.

"In fact, from the metrics we see, Amazon currently gets more traffic from India than Flipkart does, even though the former has no formal presence in India," he added.

Amazon already does a lot of business in India through its UK website, amazon.co.uk, because the company offers free shipping and handles customs for all books, music and DVDs bought from that site and shipped to India, Murthy said.

"But this would be significantly smaller than what Amazon could do if it came with a full offering into India," he added.

Restrictions on overseas investment in multi-brand retailers now effectively exclude large retailers such as Wal-Mart Stores and Amazon from the Indian market.

However, Indian laws allow foreign companies to operate online marketplaces that bring together consumers and third-party merchants. Indeed, eBay, the world's largest online marketplace operator, is "very strong" in India, Murthy said.

Marketplace

Amazon is taking a similar approach as it enters India and has been wooing executives and a few merchants to join its own marketplace in the country, Murthy added.

He declined to identify them because he said they likely agreed to keep discussions with Amazon confidential.

A lot of consumers in India still pay with cash, so online retailers such as Flipkart often have couriers deliver items and collect payments at the destination.

Amazon's recent job listing for a Stations Operations Manager in Mumbai suggests the company is planning a delivery network of its own in the city.