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Amazon's (AMZN) New Facility to Boost Its Prospects in India
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Amazon (AMZN - Free Report) is making every effort to bolster its e-commerce business in India. The company is on its fulfillment network expansion spree in the country.
The latest launch of a fulfillment center in West Bengal is a testament to the above-mentioned fact. Notably, the new facility marks the largest of its kind in the state, whose storage capacity is 1.2 million cubic feet.
With the latest move, the company’s total number of fulfillment centers in the state reaches five, which is equivalent to more than 3.4 million cubic feet of storage capacity. Thus, the move has doubled Amazon’s storage capacity in the state.
Along with the facility's launch, the company tripled the size of one of its existing fulfillment centers in the state for large appliances and furniture to more than 6 lakh cubic feet.
The above-mentioned endeavors are likely to aid Amazon in gaining solid customer momentum ahead of the festive season in the state. Expanding the fulfillment network will not only help the company to serve customers of West Bengal but also the North-Eastern states.
The latest move not only expands the fulfillment network of Amazon but also brings socio-economic benefits to West Bengal.
With the new fulfillment center, several employment opportunities will be created for the locals.
Amazon strives to support more than 25,000 sellers in the state, who will get the opportunity to expand their reach to customers on the back of the latest move.
The move will boost the company’s distribution strength, which, in turn, will aid it in delivering an enhanced shopping experience to customers. Customers will be able to enjoy fast delivery of their purchases.
The move is an addition to the company’s growing investments in the state. Apart from the five fulfillment centers, Amazon operates two sorting centers, 85 Amazon-owned and delivery service partner stations, and several ‘I Have Space’ stores.
Amazon’s Expansion Spree
The latest launch is in sync with Amazon’s deepening focus on expanding its fulfillment network in India, wherein the online retail market holds immense growth opportunities.
Per a report from India Brand Equity Foundation, the India e-commerce market is expected to reach $188 billion by 2025 and $350 billion by 2030. Further, the market is expected to hit $74.8 billion in 2022.
Notably, Amazon owns more than 60 fulfillment centers in the country. Its overall storage capacity spans more than 43 million cubic feet.
Last year, the company launched two fulfillment centers in Maharashtra, of which one is located in Mumbai and another in Pune.
It opened two fulfillment centers in Uttar Pradesh’s Lucknow.
Amazon launched a specialized fulfillment center in Gujarat, bringing an extra 1.4 million cubic feet of storage capacity. It has also expanded its existing fulfillment facility in the state.
We note that Amazon remains well-poised to penetrate the booming India e-commerce market, with its continued investment in fulfillment centers, which are giant warehouses that help online retailers store and ship products, and handle returns quickly.
However, escalating expenditure related to fulfillment remains a major concern for Amazon. Notably, the company’s cost of fulfillment increased 22.6% year over year to $20.3 billion in first-quarter 2022.
Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #5 (Strong Sell).
Image: Bigstock
Amazon's (AMZN) New Facility to Boost Its Prospects in India
Amazon (AMZN - Free Report) is making every effort to bolster its e-commerce business in India. The company is on its fulfillment network expansion spree in the country.
The latest launch of a fulfillment center in West Bengal is a testament to the above-mentioned fact. Notably, the new facility marks the largest of its kind in the state, whose storage capacity is 1.2 million cubic feet.
With the latest move, the company’s total number of fulfillment centers in the state reaches five, which is equivalent to more than 3.4 million cubic feet of storage capacity. Thus, the move has doubled Amazon’s storage capacity in the state.
Along with the facility's launch, the company tripled the size of one of its existing fulfillment centers in the state for large appliances and furniture to more than 6 lakh cubic feet.
The above-mentioned endeavors are likely to aid Amazon in gaining solid customer momentum ahead of the festive season in the state. Expanding the fulfillment network will not only help the company to serve customers of West Bengal but also the North-Eastern states.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Rationale Behind the Move
The latest move not only expands the fulfillment network of Amazon but also brings socio-economic benefits to West Bengal.
With the new fulfillment center, several employment opportunities will be created for the locals.
Amazon strives to support more than 25,000 sellers in the state, who will get the opportunity to expand their reach to customers on the back of the latest move.
The move will boost the company’s distribution strength, which, in turn, will aid it in delivering an enhanced shopping experience to customers. Customers will be able to enjoy fast delivery of their purchases.
The move is an addition to the company’s growing investments in the state. Apart from the five fulfillment centers, Amazon operates two sorting centers, 85 Amazon-owned and delivery service partner stations, and several ‘I Have Space’ stores.
Amazon’s Expansion Spree
The latest launch is in sync with Amazon’s deepening focus on expanding its fulfillment network in India, wherein the online retail market holds immense growth opportunities.
Per a report from India Brand Equity Foundation, the India e-commerce market is expected to reach $188 billion by 2025 and $350 billion by 2030. Further, the market is expected to hit $74.8 billion in 2022.
Notably, Amazon owns more than 60 fulfillment centers in the country. Its overall storage capacity spans more than 43 million cubic feet.
Last year, the company launched two fulfillment centers in Maharashtra, of which one is located in Mumbai and another in Pune.
It opened two fulfillment centers in Uttar Pradesh’s Lucknow.
Amazon launched a specialized fulfillment center in Gujarat, bringing an extra 1.4 million cubic feet of storage capacity. It has also expanded its existing fulfillment facility in the state.
We note that Amazon remains well-poised to penetrate the booming India e-commerce market, with its continued investment in fulfillment centers, which are giant warehouses that help online retailers store and ship products, and handle returns quickly.
However, escalating expenditure related to fulfillment remains a major concern for Amazon. Notably, the company’s cost of fulfillment increased 22.6% year over year to $20.3 billion in first-quarter 2022.
Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the retail-wholesale sector are AutoNation (AN - Free Report) , The Kroger (KR - Free Report) and Solo Brands (DTC - Free Report) . While AutoNation currently sports a Zacks Rank #1 (Strong Buy), Kroger and Solo Brands carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AutoNation has returned 15% over a year. The long-term earnings growth rate for the AN stock is currently projected at 24.74%.
Kroger has gained 43.7% over a year. The long-term earnings growth rate for the KR stock is currently projected at 9.88%.
Solo Brands has lost 74.1% over a year. The long-term earnings growth rate for the DTC stock is currently projected at 16.74%.