BENGALURU: Amazon has jumped ahead of competition in the US in terms of minimum wage, but in India it is still in the same bracket as Flipkart, though experts say it is fast becoming the more attractive option for delivery and warehousing staff.
Amazon this week increased its minimum wage in the US to $15 an hour from $11, more than double the federal minimum wage of $7.25 and ahead of wages paid by retail giants Walmart and Target.
In India, both Amazon and Flipkart pay their blue-collar workers 25-60% above state-mandated minimum wages in the major cities they operate in.
Amazon India pays its workers 25% more than the minimum wage in Bengaluru, and about 60% higher than the minimum wages in cities such as Mumbai, Pune and Hyderabad, according to data from staffing agencies Xpheno and TeamLease. Flipkart pays similarly.
“In India, the demand for delivery boys far exceeds the supply of productive resources and, hence, wages are determined purely through economics,” said Rituparna Chakraborty, cofounder of TeamLease. “The larger ecommerce companies that are fighting it out for talent in the same territories are compelled to pay wages in line with the market.”
She added that the wages of ecommerce delivery personnel, “without considering incentives and additional benefits, are already above the mandated minimum wages in different parts of the country.”
Amazon India and Flipkart classify their delivery staff as semi-skilled, and some kinds of workers in their sorting centres as unskilled, industry members said.
The minimum wages vary across states, and so do the wages offered by these companies.
As per data compiled from Xpheno and TeamLease, delivery staff in cities like Mumbai and Pune get paid about Rs 15,000 a month, nearly 60% higher than the minimum wage of Rs 9,498 in Maharashtra. In Bengaluru, these workers are paid around Rs 17,000 a month, 25% higher than the minimum wage of Rs 13,400 in Karnataka.
Despite the similar wages Flipkart and Amazon India pay their workers, Xpheno cofounder Kamal Karanth believes Amazon has emerged as the more attractive employer for blue-collar jobs due to the incentives and benefits it offers.
“Amazon is much above minimum wages for delivery staff in all states, and so in India, they actually do not need to do any correction,” Karanth said. “In fact, recruiters feel Amazon is the most attractive brand to attract talent, from the wages perspective.”
According to Xpheno, Amazon offers five working days to its delivery and warehousing staff, compared to six days at Flipkart, and offers higher incentives and benefits.
An executive at a logistics company that works with Amazon and Flipkart also said Amazon’s benefits were marginally higher than that of Flipkart’s.
Amazon said it reviews compensation annually to ensure it is competitive. “In India, associates in our operations sites continue to receive compensation that is set competitively to the Indian market. While the recent announcement was specific to the US and the UK, we will continue to evaluate and review compensation annually,” a company spokesperson said.
In the US, Amazon’s move to increase minimum wages is expected to put pressure on Walmart, Target and others, whose minimum wages, as per reports, stand at $11 and $12, respectively
The development was first reported by ET Retail.com