Amazon Prime Air : A Revolution in Online Shopping

It’s one of those lazy Sundays. You’re surfing e-commerce sites for those lovely pair of shoes you’ve always wanted. You find them! You can’t resist placing the order. Less than thirty minutes later, you hear that familiar buzzing noise outside your door. You’re overjoyed – you’re shoes have already arrived, drone-delivered. Sounds like a scene from a Science fiction movie? Not really. And, you can go ahead and pinch yourself too, because is this is no dream either. Amazon founder and CEO, Jeff Bezos has revealed yesterday that they are developing a drone-based delivery system called Amazon Prime Air, the goal of which is to get packages into customers’ hands in 30 minutes or less using unmanned aerial vehicles (UAVs) also known as drones.

Amazon Drone Prime Air

As soon as your order is placed, it is packed in record time in one of Amazon’s 96 massive warehouses worldwide, also known as fulfillment centers – each about 1.2 million square feet in area – the size of 20 football fields! These will then be put on a delivery carousel from where they will be picked up by the drones – eight rotor helicopters which Bezos calls an “octocopter.”  These will then be instructed to deliver at designated GPS co-ordinates. They will be able to deliver within a 10 km radius and safely carry about 5 pounds in weight, which as per Bezos, accounts for about 86 percent of the items Amazon delivers.

This delivery system could account for massive reductions in Carbon emissions by reducing the number of delivery trucks doing the rounds. Further, they use electric motors which make them even greener.

However, for those of you expecting to be drone-delivered your orders tomorrow, Bezos says it will take a few, maybe four or five, years. The project is still on the anvil in Amazon’s next-generation R&D lab and has just about entered the experimental stage. In an interview to CBS’s 60 minutes, Bezos said the company is still working on redundancies and reliabilities and  the systems required to ensure that mishaps like the drone landing on somebody’s head while they’re walking around the neighborhood don’t happen. Get a sneak peek of Amazon Prime Air in the video below.

Apart from this, the United States Federal Aviation Administration (FAA) regulations currently prohibit use of drones for commercial purposes. However, these are expected to change when a new set of rules for unmanned aircraft come into place by 2015. Security implications will have to be considered too. But Bezos is optimistic, telling 60 minutes, “Could it be, you know, four, five years? I think so. It will work, and it will happen, and it’s going to be a lot of fun.”

Amazon is a pioneer in the field of e-commerce and has been the poster boy of e-commerce success ever since its inception almost two decades ago. Known for its innovative ways and attempts to streamline their processes and ensure the best service, this new innovation from the Amazon stable comes as no surprise. Also, coming within just a few days of Operation Blue Virus exposing the misuse of Social Media for nefarious reasons; drones, earlier synonymous with attacks causing death and destruction, now being used to make life easier and more convenient just goes to reiterate the fact that any technological advancement, used correctly, responsibly and ethically can be used to work wonders.

Amazon India tries to capture the 50m userbase & 10,000 cr market

 

The digital commerce market in India was valued at INR 47,349 Crores in 2012 and is expected to grow by 33 percent. It is undoubtedly the fastest growing online market in the last 12 months when compared with the other BRIC Countries. According to the latest Digital Commerce Report, by the Internet and Mobile Association of India (IAMAI) and IMRB International.

The report finds that while Online Travel, which includes booking rail, air, bus tickets, hotel accommodations and tour packages comprised a majority 71 percent of the whole Digital-Commerce market in 2012,E-Tailing, which includes purchases of various consumer products/services such as electronics, apparels, footwear, jewellery, home & kitchen appliances, consumer durables, furnishings, constituted only 16 percent of the overall share. This is the segment which all ecommerce companies including Amazon India are trying to target.

Amazon India tries to capture Indian Ecommerce Market

Financial Services, which include services such as paying insurance premiums and renewals, paying utility and mobile bills, trading shares and securities amounted to 6 percent of the overall share. B2B and B2C Classifieds (jobs, matrimony, car, real estate etc.) contributed 5 percent, whereas other online services such as online entertainment ticketing, online food delivery, buying discounts/deals/vouchers etc. constituted 2 percent of the overall digital commerce market in 2012.

With more and more people planning their payments and Financial services online, market was valued at INR 2,886 Crores in 2012 and is expected to grow by 25 percent and reach to INR 3,607 Crores by the end of year 2013. According to the report, Classifieds market has seen a significant growth and has reached INR 2,354 Crores in 2012. Classifieds as a category has grown with a CAGR of 45 percent growth from 2009 and is expected to grow by another 30 percent to INR 3,061 Crores by 2013.

Online travel industry in India has on an average grown by 32 percent from INR 14,953 Crores in 2009 to INR 34,544 Crores in 2012 and is estimated to grow by another 30 percent and be valued at INR 44,907 Crores by the end of December 2013. The travel industry also sees interesting fact about the average cart value of goods purchased ranging from 17$ in IRCTC to about 204$ and 166$ in Make my trip and Yatra.com respectively.

The E-Tailing category has grown from INR 1,550 Crores in the year 2009 to INR 6,454 Crores in year 2012. With the entry of the world’s largest online retailer, Amazon through the launch of its online marketplace in India, Amazon.in and hundreds of start ups emerging, this category is estimated to grow by 55 percent and cross INR 10,000 crores by the end of 2013 December.

India represents Amazon’s tenth marketplace where buyers can browse through a catalogue of 7 million books and 12,000 movies titles initially. The company is planning to expand its product footprint to cameras, mobiles and other electronics devices.

With the Digital commerce market having so much to offer to the country, one could only see internet and Ecommerce reaching not just the metropolitans and the major cities in India but also hitting the Indian Villages soon. Of course, it comes with its humongous set of challenges forcing even Flipkart to follow a marketplace (no-inventory) model. For now, its time to watch the big players battle it out in the ecommerce market