Amazon

Amazon Swaps Drones For Bikes In India

While startups have more power to change their industries today than ever before, it’s arguable that much of the innovation still comes from companies at the top of the retail pyramid, like Amazon. Massive revenue streams certainly make it less risky for a retailer of Amazon’s size to experiment with cutting-edge technology, like drones and automation in fulfillment centers, and constantly raising the bar for innovative competence and consumer expectations in the industry can only put more pressure on its competitors.

However, just when it looked like Amazon might be heading off the deep end in its frenzy to smooth out wrinkles anywhere along the supply chain, the retailer turns around and ditches all of that technology at the drop of a hat.

That’s exactly what Amazon is doing at the moment in India, a country embracing an accelerating eCommerce trend like brands dream about. The Economic Times reported that as more and more Indian consumers have turned to online shopping, Amazon has been tasked with establishing a suitably efficient network in densely populated cities, like Mumbai, that may not have the infrastructure that deliveries in the Western world require — an Amazon delivery van may take hours to navigate a few crowded city streets. Instead of drones or robotic drivers, Samuel Thomas, director of transportation for Amazon India, told ET that his company had turned to bicycle couriers to ferry packages to customers on time, even in the most compact urban environments on the planet. Oh, and it’s good for the environment, too.

“Being conscious of the environment we live in, reducing carbon footprint is the need of the hour,” Thomas said. “We have taken this eco-friendly step by introducing bicycle deliveries, which also helps delivery associates with easier access in congested metro cities.”

Anonymous sources with knowledge of the bike courier program told ET that workers could expect to earn anywhere from $100 to $125 a month on base salary, with bonuses added in for successful deliveries or proven benchmarks. This comes in significantly under the approximate $200 every month that motorbike or scooter drivers can make working with Amazon in India — a fact that can’t have escaped notice as Amazon deliberated last-mile delivery options for Indian cities.

And just as “location, location, location” is more of a way of life in real estate than a throwaway platitude, the nature of emerging Indian markets very likely forced Amazon’s hand when it came to deciding the most efficient manner of delivery. Amazon started the bicycle courier program in December in Mumbai, before expanding it to other metropoles, like Hyderabad, Delhi and Chennai. Devangshu Dutta, CEO of retail consultancy firm Third Eyesight, told ET that India’s incredible population density — India’s 2011 census found 17.5 percent of the world’s population living on 2.4 percent of its land — necessitated a different approach than what has worked in Western economies.

“In India, the density of population is higher, hence bicycles will help them reduce cost compared to bikes [motorcycles]. Similarly, in the U.S., since the market is less dense, air cargos will help them reduce cost, reduce time and improve accuracy,” Dutta said. “The purpose is the same; how it is done is different, depending on the geography.”

Another potential angle is the immediate availability of labor. Bicycles outnumber their motorized variants in India by several factors, and if Amazon is looking for help yesterday, starting a program that immediately counts thousands more workers as eligible, without requiring any startup cost on their part, could make working for the retailer an enticing proposition. While this may add a significant amount of uncontrollable variables — i.e., traffic conditions and cyclist speeds — into a delivery process that Amazon has compartmentalized into discrete, data-driven steps, reaching the end of the last mile on bike, foot or drone wing is always an accomplishment in imperfect market conditions.

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