Amazon Pantry

 Online commerce titan Amazon has stated that its grocery delivery service –
Amazon Pantry – is now present in 110 cities across India.

 Launched as a pilot in Hyderabad in 2016, Amazon Pantry was available in over 30

cities by 2017. It ensures that customers get the products they order on Pantry (all
together) the very next day.

 According to a press release from the company, the new cities include Ahmedabad,
Amritsar, Bhubaneswar, Coimbatore, Hooghly, Hubli, Indore, Kanpur, Lucknow,
Nagpur, Panjim, Vijayawada, and Ranchi, among others.
 In Bengaluru, Delhi, Mumbai, Chennai, Hyderabad, Kolkata, and Pune,
customers can choose from time slots to schedule their order deliveries.

 Commenting on the expansion, Saurabh Srivastava, Director - Category

Management, Amazon India said that Amazon Pantry has become popular with
customers as it offers savings and convenience of doorstep delivery.

 We have now added more than 70 cities and towns in the last few months to take the
total number of cities covered by Amazon Pantry to 110.

 Customers even in smaller cities like Ichalkaranji in Maharashtra, Kaithal in

Haryana, and Belgaum in Karnataka can now enjoy the benefits of Amazon
Pantry.

 Amazon India’s food retail licence holding entity, Amazon Retail, sells grocery and
food items on the marketplace in full compliance with FDI regulations despite a
minor.

 In fact, Pantry was Amazon India’s aggressive bet in the Indian grocery space
dominated by players like Bigbasket, Future Retail, and Reliance Retail.

 Amazon’s nemesis Flipkart, owned by Walmart, has also entered the e-grocery
market, which is expected to reach $17.39 billion by 2022.
 Amazon Pantry’s product range includes staples, snacks, beverages, packaged
food, household supplies, personal care, and baby products, among others.

 Fresh vegetables and fruits are not included in this service.

 It will also deliver the orders in a day. ... Competing with retail chains such as Big
Bazaar and Spencer's, Amazon Pantry is replicating an online supermarket model
that delivers up to 15 kg of products.

 Only products that are available near a customer’s location show up under Pantry
when he logs in, as Amazon needs to ensure all products ordered are packed together
and reach the customer the very next day.

 It charges Rs 20 per box as delivery charges. It is free for Amazon prime

members.
 In total, Amazon was 10.4 percent more expensive to shop at for the products listed.

 But look at just the Food & Beverages category and Amazon was cheaper by a
whopping 22.51 percent. ... But if you're a loyal Walmart shopper for groceries, it's
worth checking out Amazon to compare the products you frequently buy.

 The Amazon Pantry service allows users to fill a box with a maximum capacity of
15 kg, with items from across six categories: cooking essentials, personal hygiene,
household supplies and pets, snacks and beverages, haircare and skincare and
baby products.

 Currently, Amazon Pantry is available in Ambala, Chandigarh, Dehradun,

Delhi, Gurugram, Faridabad, Noida, Ghaziabad, Jaipur, Mohali, Panchkula,
Panipat, Kolkata, Mumbai, Pune, Bengaluru, Chennai, Hyderabad,
Secunderabad, Mysuru, Mangalore, Manipal, Kanchipuram, Vijaywada,
Pondicherry, Vellore, Warangal.
 "Consumables is a fast growing category for Amazon.in. Amazon Pantry has
become popular with customers... We have now added more than 70 cities and
towns in the last six-seven months to take the total number of cities covered by
Amazon Pantry to 110," Amazon India Director Category Management Saurabh
Srivastava said in a statement.

 Through Amazon Pantry, customers get access to about 5,000 products from over
500 brands across categories like staples, household supplies, personal care, and
others.

 In select cities like Bengaluru, Delhi, Mumbai, Chennai, Hyderabad, Kolkata and
Pune, it allows customers to choose time slots to schedule order deliveries.

 Amazon is betting heavily on the grocery segment in India. The company has
also committed $500 million to its food retail venture.

 The grocery segment accounts for a significant portion of the unorganised retail
segment in the country.

 With people becoming comfortable buying even milk and bread online, the e-grocery
market is projected to witness a strong growth over the next few years in India.

 Important of the consumer goods segment for Amazon India: -

 While categories like fashion and electronics serve a different need, we know that
people buy a mobile phone once or twice a year, and a refrigerator once in two years.
So you cannot make Amazon a habit if you focus on just these.

 If you look at the spending habits of Indian customers, 60-70% of their wallet goes
toward consumable products.
 They are currently selling almost 20 lakh (200,000) products in the FMCG and
consumables segment. It is one of the fastest growing categories and biggest in terms
of volume.

 It has been growing in triple digits for Amazon India over the last four years
consistently.

 Amazon India management of warehousing and delivery for perishables and

time-sensitive items: -

 We curate warehouses according to customer preferences. For instance, rice in

Bengaluru is very different from that in Delhi or Kolkata.
 Also, there is a need to make sure that items are always in stock because, for Amazon
Pantry, we offer next-day delivery. With Amazon Now, we limit the geographies we
serve, in order to make sure that we can meet the delivery promise.

 There are different operations and transportation teams for this vertical, which include
a mix of third-party courier services like Blue Dart and FedEx, and our own
fulfillment channel.

 Depending on where the customer is and who can reach there faster, our systems
automatically allocate the most efficient delivery service. As the machine learns more
of these patterns, we’ve been able to push delivery timelines.

 Earlier, an Amazon Pantry order had to be placed by 6pm to get it the next day.
Now, even if you place it by 10pm or 11pm at night, you still get it the next day.

 Discounts & Offers: -

 Amazon has also come up with two other formats for India — ‘Super Value Day’
and ‘Subscribe and Save.’ Super Value Day allows customers to get back cash on
their FMCG purchases on the first and second day of the month.

 Whereas Subscribe and Save enables buyers to subscribe to a product for regular
purchase and get additional discount.
 Amazon’s Business Model:

Key Key Activities Value Proposition Customer Customer

Partners Relationship Segment
Merchandising Competitive pricing
Sellers Reviews and Anyone with
Development, design, and Selection of goods
comments internet
authors optimization
Convenience connection
Customer service
Publishers Manage supply chain and
Fast Delivery Somebody
logistics • Phone
logistic who is
Secure and build partnership • Online chat looking for
services
• Email convenience

Key Resources Channels of

ecommerce
Fulfilment centers Amazon's website &
and Fast
Apps
Technological delivery
Affiliate Program
Infrastructure

Online platform
Cost Structure Revenue Streams

Driven by Technology Amazon Prime subscription fees

Operation of Fulfilment centers Commission

Customer service centers Transaction Fees

Software development
Figure 5: Amazon’s Business model

Amazon’s USP:

 Amazon is a trusted brand providing online shopping experience for customers.