As the year draws to a close, cross-border e-commerce sellers are gearing up for the peak sales period surrounding Cyber Monday. However, supply chain stability remains a persistent concern, with recent developments in India and domestic logistical challenges creating new uncertainties.
Amazon India Shuts Down Food Delivery Service
Amazon India has notified its restaurant partners that it will discontinue its food delivery service "Amazon Food" effective December 29, 2022. The company stated this decision followed careful evaluation as part of its annual operational planning review process. The phased shutdown aims to minimize disruption for customers, partners, and affected employees, with transition support being provided.
Launched in May 2020 in select Bangalore neighborhoods, Amazon Food expanded to cover 62 postal codes by March 2021. The service partnered with approximately 3,000 restaurants, including major brands like McDonald's and Domino's Pizza. The dedicated team comprised about 25 employees.
Sameer Khetarpal, Amazon India's Category Management Director, had previously emphasized the company's commitment to integrating the service into consumers' daily lives. Notably, Khetarpal transitioned to become CEO and Managing Director at Jubilant Food Works in September 2022.
Logistical Hurdles for Cross-Border Sellers
The Black Friday sales period presented a mixed picture for Amazon U.S. marketplace sellers. While initial sales were sluggish, a significant surge occurred on Black Friday itself, with many sellers reporting 2-3 times their normal order volume. Top-performing sellers and those running lightning deals saw increases of 5-6 times or more.
According to the National Retail Federation, over 166 million Americans planned to shop during the Black Friday-Cyber Monday period, an increase of nearly 8 million from 2021. Adobe Analytics projects Cyber Monday 2022 sales could reach $11.2 billion, potentially surpassing Black Friday as the year's largest online shopping day.
However, recurring pandemic-related disruptions in multiple regions have introduced logistical uncertainties. Many sellers now face inventory shortages following their Black Friday success but encounter shipping challenges due to these supply chain complications.
Strategies for Supply Chain Resilience
Industry experts recommend several proactive measures to maintain shipping schedules:
- Develop comprehensive shipping plans: Analyze historical sales data, market trends, and inventory levels to create detailed replenishment strategies that prevent stockouts.
- Monitor storage capacity policies: Stay informed about Amazon's frequently updated inventory storage limits to avoid shipping delays caused by space restrictions.
- Increase safety stock: Where storage capacity permits, maintain additional inventory buffers to account for potential shipping delays.
- Optimize supply chain management: Strengthen supplier relationships and diversify logistics channels to reduce dependence on single providers.
- Prepare for extended shipping disruptions: Establish contingency plans including customer communication protocols and product mix adjustments to mitigate prolonged shipping challenges.
Supply Chain Challenges and Opportunities
The current environment presents both significant challenges and opportunities for cross-border e-commerce operators. Pandemic effects, geopolitical factors, and trade policy changes have collectively increased supply chain volatility. However, sellers who enhance their supply chain capabilities can gain competitive advantages through:
- Digital transformation: Implementing data analytics and AI for smarter supply chain decision-making.
- Flexible supply networks: Building adaptable systems that quickly respond to market changes.
- Localized operations: Establishing regional warehouses and service centers to improve customer experiences.
- Sustainable practices: Developing environmentally responsible supply chains that enhance brand reputation.
In this complex operational landscape, cross-border sellers must continuously improve their supply chain resilience to maintain competitiveness. Proactive planning and strategic adaptation can transform these challenges into opportunities for sustainable growth.