Amazon Air lifts off to India to speed up delivery
Amazon is the first global e-commerce company to launch a dedicated air cargo network in India with the country’s e-commerce industry expected to reach $99 billion by 2024.
Amazon India made a major business leap in the country this year with the launch of a dedicated air cargo network that will support more than 1.1 million Indian sellers speed up the process of delivering orders and shipments to customers.
Amazon India says the launch of Amazon Air on January 23, 2023 will further enhance its transportation network and enable faster deliveries to customers.The company will utilize the complete cargo capacity of two Boeing 737-800 freighters that will be operated by Quikjet Cargo Airlines Private Limited.
The American retail behemoth has been growing hugely in India, though presently its contribution to overall sales is marginal. Tech investor Gene Munster forecasts that India will contribute between 15 and 20 percent to Amazon’s growth by 2025. Accordingly, Amazon announced investments of at least $6 billion in India, including a $1 billion pledge to help small businesses.
To address the growing market and improve its delivery schedules, which many consider to be exceptional, Amazon Indialaunched Amazon Air in Hyderabad. The Minister for Municipal Administration & Urban Development, Industries & Commerce, and Information Technology of Telangana, K.T.Rama Rao was present at the induction ceremony of Quikjet’s new Amazon-branded aircraft along with Amazon’s senior leadership, Akhil Saxena – Vice President, Customer Fulfilment (APAC, MENA & LATAM) & WW Customer Service, and Sarah Rhoads, Vice President, Amazon Global Air.
First e-commerce company to offer dedicated air cargo network
Amazon is the first e-commerce company in India to partner with a third-party air carrier to provide a dedicated air cargo network, reaffirming its long-term commitment to strengthen its transportation infrastructure in India. Quikjet will use the aircraft to transport Amazon customer shipments to cities such as Hyderabad, Bangalore, Delhi, and Mumbai.
“Telangana offers a conducive environment for the development of multi-modal connectivity and I take great pride in the fact that Hyderabad has emerged as a major hub for e-commerce distribution and supply chain activities. We have been working towards strengthening the state’s air cargo infrastructure, and we welcome the launch of Amazon Air which will further assist in making Hyderabad a cargo hub for the country and will create additional employment opportunities in the state. My heartiest congratulations to the Amazon team on this milestone, and for taking a step forward to develop a strong and resilient infrastructure which is crucial for the country’s economic growth,” said Kalvakuntla Taraka Rama Rao, Minister for Municipal Administration & Urban Development, Industries & Commerce, and Information Technology of Telangana.
“Amazon Air comes to India at an important time. Over the last few years, we have taken many positive steps to build our fulfilment, transportation and logistics infrastructure in the country. Our investment in Amazon Air will only further improve the delivery experience for our customers in India. Moreover, the launch will support over 1.1 million sellers in India, enabling growth for ancillary businesses such as transportation and aviation. This marks a very important step for our sellers and our customers, as well as a huge step forward for the aviation industry. We are celebrating a significant milestone in our global mission to transform the future of logistics,” said Akhil Saxena, Vice President – Customer Fulfilment (APAC, MENA & LATAM) & WW Customer Service, Amazon.
“We’re thrilled to launch Amazon Air in India to ensure we can provide our growing customer base with great selection, low prices, and faster deliveries,” said Sarah Rhoads, Vice President, Amazon Global Air.
Amazon states that it can support up to 1.1 million sellers across the country, having over 43 million cubic feet of storage space for seller inventory in India with 2.3 million square feet of processing area.
Amazon is currently capable of delivering a product to 97 percent of pin codes in India within 2 days of placing an order.Nearly 85 percent of the orders of Amazon India are delivered by Amazon delivery arm which has potential to scale fast. Adding to that thinking is the aircraft and deliveries by drone in the near future.
Amazon will still use the belly hold of passenger airlines besides deploying two freighters in four metro cities – Delhi, Mumbai, Hyderabad and Bengaluru. Saxena commented,“If earlier, I could take goods for air shipments, say by 7 pm, now I can extend it to 10 pm with a dedicated aircraft which will help in delivering goods from other FCs to you faster.”
e-commerce sector forecast to grow at CAGR 27%
The Indians e-commerce sector is forecast to grow at a CAGR of 27% over 2019-24 and is expected to reach $99 billion by 2024, according to a report released by EY-IVCA Trend Book 2021. Grocery and fashion/apparel are said to be the key drivers of this growth. “The online retail market in India is estimated to be 25% of the total organized retail market and is expected to reach 37% by 2030-27.”
A report by Recogn revealed that India would have 228 million online consumers by the end of 2022, a 45% jump though the latest figures have not been updated. India’s digital drive has added to this momentum.
To sustain this growth, the e-commerce giant is scaling up through various services, focusing on improving logistics which is critical to business growth. It is here Amazon has partnered with Quikjet, a Bengaluru-based airline which started in 2007.
Quikjet provides specialised service offerings for the air cargo market as a neutral aggregator and aircraft operator. Quikjet has been a specialist airline with freighter capacity to address specific customer needs including time definite overnight deliveries for Express shipments besides Special Cargo. This strength, Amazon is trying to leverage.
Amazon Air in US covers over 70 destinations worldwide
Amazon is taking its US success to India which is a huge market. In the US, the service was launched in 2016, operating an air cargo network that has grown to include over 110 aircraft and more than 70 destinations worldwide.
Since the launch of Amazon Air, Amazon has invested hundreds of millions of dollars in air logistics capabilities and generated thousands of new jobs around the world. It continues to expand globally to meet the needs of its growing customer base, while also investing in employment and environmentally-conscious solutions to power its network.
Amazon which is guided by four principles: customer obsession rather than competitor focus; passion for invention; commitment to operational excellence; and long-term thinking, is doing pretty well in the Indian scenario, though competition is heating up with many Indian top players, including Flipkart backed by Walmart, in the game.
Prime Air drones for delivery
Amazon recently unveiled the design of its new Prime Air delivery drone, which will handle high temperatures and light rain.The new ‘MK30’ drone will enter into service in 2024 and is expected to be 25 per cent quieter than current ones. “The purpose and objectives of the new drone are the same as its predecessor’s designs: transport packages weighing up to five pounds while flying hundreds of feet in the air,” the company has said.
“We have created a sophisticated and industry-leading sense-and-avoid system that will allow our drones to operate at greater distances while safely and reliably avoiding other aircraft, people, pets, and obstacles,” said Amazon.
“We’re now introducing our next generation delivery drone: the MK30. Due to come into service in 2024, this drone will be lighter and smaller than the MK27-2, the drone that will be making deliveries in Lockeford and College Station. The MK30’s increased range, expanded temperature tolerance, safety-critical features, and new capability to fly in light rain will enable customers to choose drone delivery more often.”
Amazon, as also other players, are not just keen on improving deliveries to customers, but also reaching underserved and unserved areas. The network Amazon is creating is amazing, to say the least, adding to customer experience. Customer delight is the mantra that e-commerce giants are focussed on, good tidings for the consumers at large.