Amazon preps for a heated race in India as Diwali holiday sales kick off

Amazon has ramped up in India to compete with local rival Flipkart as the two e-commerce companies launch four-day sales as part of the Diwali holiday shopping frenzy.

It’s mere weeks to the festival of Diwali, the season of lavish, reckless consumption in India, and in a cavernous warehouse minutes from the Hyderabad airport, hundreds of workers are furiously sorting mountains of everyday items.

There are sunglasses and shaving creams, sewing machines, vegetable slicers and microwave ovens, all lined up by to sate the shopping frenzy that is India’s Black Friday and Christmas combined. The windowless 400,000-square-foot facility is fitted with 300 miles of cables and 16,000 fire sprinklers. Sellers pour in with their wares precariously balanced on two-wheelers, or in autorickshaws and trucks.

It’s Amazon’s largest — and newest — such center in the South Asian country, and it offers a view into the company’s ramp up in this crucial market before a festival-sale collision this week with local rival Flipkart Online Services. Its investments in India show the Seattle-based retailer using a strategy similar to the U.S., where a vast network of warehouses allows it to offer quick, cheap deliveries and distinguish itself from competitors like eBay.

The e-commerce giant has a lot riding in the country after its washout in the world’s other large market, China, where Alibaba Group Holding and other local players have prevailed. Amazon has said its international loss grew more than fivefold from a year ago to $724 million in the quarter ending in June. Part of that can be attributed to its investments in India, including additions to storage capacity.

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“Fulfillment centers are extremely critical for the success of our Indian operations,” said Amazon’s India head, Amit Agarwal. “We have doubled our storage capacity in the last one year to meet our rapid growth in India.”

Bangalore-based Flipkart still has a lead in the Indian e-commerce market. But Amazon is also expanding at ripping speeds, and in the last year has roughly doubled its size on several metrics. Warehouse capacity has risen to 13 million cubic feet, sellers to over 225,000 and products to more than 160 million.

During the lead-up to the annual holiday, Amazon and Flipkart have played a cloak-and-dagger game, each waiting for the other to announce sales…

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