The encyclopedia · Strategy & Leadership · Operational decision · 2015–2022
Amazon turned India's kirana shops into its last-mile delivery network
Amazon's I Have Space pays local shops to deliver within 2-4 km in free time — 28,000 partners across 420 towns, later scaled globally as Hub Delivery.
Amazon · Amazon India
The solution
India's last mile is e-commerce's hardest problem: addresses are informal, cities are dense, and building depots and delivery fleets city by city is slow and expensive. Amazon needed reach fast to compete with homegrown rivals.
In May 2015 Amazon launched 'I Have Space' as a pilot with 2,500 stores. Kirana and neighbourhood shops delivered Amazon packages within 2-4 km of their store during non-peak hours, were paid per package with cash-on-delivery enabled, and doubled as pickup and returns points. By September 2016 the network had grown to 12,500 stores in 50 cities and was being pushed into tier-II and tier-III cities.
The model scaled: Amazon India reports more than 28,000 neighbourhood and kirana partners in close to 420 towns and cities, with partners earning extra income plus insurance, and Amazon credits the program with expanding delivery into the country's hinterlands.
Why it worked
- Store owners' spare hours and existing space are near-zero-marginal-cost delivery capacity
- Neighbourhood knowledge and goodwill solve India's address problem without new technology
- Per-package pay with cash-on-delivery made the economics simple for small shops
- Partners gain extra income and footfall, so the network grows with demand
What can be applied
When the last mile is costly and addresses are messy, don't build more infrastructure — buy the spare capacity and local trust that already exist. Coverage scales with partners, not capital.
Aftermath
By 2022 the program had more than 28,000 kirana and neighbourhood partners across close to 420 towns and cities, and Amazon credited it with reaching India's hinterlands while giving store owners additional income and insurance coverage. The same idea — local stores as micro delivery hubs — later expanded globally as Amazon Hub Delivery, first to Mexico around 2019 and Japan and the United States around 2020, then to Spain, Egypt, the UAE and Brazil, an example of an India-born solution scaling worldwide.
Sources
- Amazon's 'I Have Space' program supports local stores and MSMEs
- Amazon India Looks To Expand Reach, Increases Last Mile Delivery Network To 12,500 Stores
- Built for India, scaled globally: 3 Amazon innovations that started here
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