Amazon India Post

Amazon India has launched a pilot project to test India Post’s cash on delivery model, reports The Economic Times citing two people familiar with the development. Amazon India declined to comment on this project to Medianama.

The report says Amazon has already been using India Post as one of its delivery partners earlier, but it now plans to test India Post’s cash on delivery service to collect payment from its customers. Citing a senior India Post official, the report also mentions that India Post is planning to introduce additional capabilities like reverse logistics for its delivery service.

A Flipkart spokesperson also told the publication that they are currently in talks with India Post to evaluate the possibilities of using the latter’s cash-on-delivery service for its customers.

Why is this important? If the pilot turns out to be successful, this partnership could turn out to be quite critical for both Amazon India and India Post.

India Post probably has the widest delivery service in India, covering 25,000 pin codes and offers the capabilities to deliver in locations where professional courier services might not often choose to, since these might not be viable. This will possibly strengthen Amazon India’s reach for its cash-on-delivery service and could provide them with an edge over other e-commerce players.

On the flip side, India Post which is struggling to stay relevant in the country will get increased revenues on a existing route, provided they are able to reduce the delivery time of its shipments and address the issues of efficiency and reliability which has become quite critical for e-commerce businesses in the country.

India Post had launched a delivery service for e-retailers earlier in April and had signed up Snapdeal as one of its pre-launch customers.Back then, it had also mentioned plans of building 20 mechanized warehouses and booking centres to handle the shipments from e-commerce companies. The organization plans to invest around Rs 100 crore over the next few years to set up warehouses for e-commerce packages, as indicated by the ET report.

Amazon India’s Logistic Services: That being said, its also worth noting that Amazon is apparently working on its own third-party logistics service in the country starting with a pilot in Delhi-NCR region which is expected to end by February 2014. The service was to offer cash on delivery service and would apparently be available for both Amazon sellers and third party sellers.

Amazon had received government approval to set up its logistics service in India in February 2012 and is currently in the process of hiring people to set up this service.

Meanwhile, Amazon US is experimenting deliveries by flying drones, through a service dubbed as Prime Air, which aims to provide 30-minutes deliveries to its customers.