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It's too early to judge the implications of ONDC: Amazon’s Dr Pande

The biggest challenge in terms of last-mile delivery is getting the right topology and getting the stations at the right places, said Pande
Last Updated 08 June 2023, 06:01 IST

In the decade that they’ve been around Amazon.in has capitalised on its first mover advantage in every possible way to reach all serviceable pin codes in the country, building a behemoth of a logistic network that is the envy of most e-commerce enterprises. In an elaborate tête-à-tête, Dr. Karuna Shankar Pande, Director, Amazon Logistics, took DH’s Lavpreet Kaur through this journey which sketched not just the evolution of the MNC but also India’s e-commerce industry.

Edited excerpts:

Tell us about the reach and size you’ve attained in the time you’ve been in India

In the first-mile our fulfilment centres today cover 43 million cubic feet of storage space, where 1.1 million sellers bring their inventory. We have sorting centres across 19 states with storage capacity of 2.3 million cubic feet. In the last mile, we have 2,000 delivery stations (that are either operated by us or our partners) spread across 750 cities and towns. We also have about 28,000 small stores or businesses linked to us that do deliveries within 2-4 km radius of their location, when their own footfall is lean. There are also the people (gig workers) who take on the deliveries in their free time as a part-time job. This flexible process has been scaled to 65 cities.

How do you manage the voluminous workforce you deploy in the last mile?

We use tech, where for anyone to get onboard as a delivery partner, there are certain amounts of declarations and documents which they have to upload and then we use an agency to do all the background checks. In fact, we also have layered it with one more level of tech, which is “selfie at the start of the route” so we also know who has actually gone to deliver. So we make sure anybody who comes in, is background checked, trained and given nursery routes to learn how to do deliveries before we scale them up.

What are the challenges you face in last-mile delivery?

The biggest challenge is getting the right topology and getting the stations at the right places. It starts with the right network design. Getting the right flexibility by building all the delivery channels that can flex up and down based on demand is also crucial. Also, getting the right delivery channels. For example, today we leverage India Post, Indian rail.

What is driving demand today?

The way India is positioned, with a young and vibrant population, a growing middle class and its internet penetration, we’re seeing more demand coming from tier-3 and tier-4 towns. The demand is dynamic though. There was a huge tailwind during Covid. But it was in particular categories, where demand was more than the others. Post-Covid, those categories have come back to normal and demand has shifted to tier-3 and tier-4. Through our long-term planning and forecasting models, we have been able to pivot our network to meet the changes.

How do you see the intervention of ONDC panning out?

It’s actually too early to judge its implications. Obviously, it (the model) has potential and we have our own plans to get associated or onboard with ONDC.

What does the future look like for you?

We started with 0.22 million cubic feet. Now we have grown it by 190 per cent to reach 43 million cubic feet. A delivery network, which we started with 24 delivery stations, is now 2000 delivery stations. In the next 10 years, the scale-up, depending on the growth trajectory, will certainly continue. But more innovations for customers is something that will be a strong point. The flexibility and agility in the network will also keep scaling up in the coming decade.

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(Published 07 June 2023, 16:15 IST)

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