Festival season is battle season in India for online retailers.

Amazon India and Flipkart, besides a handful of other e-commerce players, will look to cash in on the extended three-month festive season starting with the Hindu festival of Dussehra this month. Up for grabs will be over 20 million shoppers, who usually make for around 40% of the annual sales of clothes, electronics, automobiles, and household items in India, as per consulting firm RedSeer’s estimates.

And this year it all begins on October 10, when both Flipkart’s flagship Big Billion Day and Amazon’s Great Indian Festival will set off. For Amazon’s Prime members, the company has announced a 12-hour early access starting noon today (October 9). While the first ends four days later, the latter will go on up to October 15.

These annual sales, designed on the lines of the US’s Black Friday and China’s Singles’ Day, have been crowd pullers for a while now. Each year, the companies take the scale a notch higher with extravagant marketing, deeper discounting, and improved technology.

This year is no different.

Redseer estimates sales of around $3 billion (Rs 22,206 crore) during the five-day discounts this year, double of the $1.5 billion that happened last year.

While discounts and deals are often seen as the trump card, an entire world of logistics and delivery systems are the key to winning.

Logistics power

Until the advent of e-commerce in India about a decade ago, the country’s logistics capabilities were limited to a handful of expensive courier companies, and the postal department was perhaps the best example of efficient deliveries to remote areas.

However, the likes of Flipkart and Amazon have changed that over the years – investing billions into building delivery capabilities, acquiring and consolidating smaller firms in the space, and opening warehouses.

For months before the festive season each year, Flipkart and Amazon go all out in scaling up storage capacity, packaging capabilities, and manpower in anticipation of high demand.

This year, the daily shipments from e-commerce portals during the festive season sales are expected to climb past three million, compared to two million last year.

India’s largest homegrown e-tailer, Flipkart, now has 66 fulfillment centres across the country. As it looks to cross $1 billion in gross merchandise value during Big Billion Day sale, the retailer has taken the following steps over the past year:

  • Doubled its storage capacity to over 60 central hubs, with a total capacity of close to 9.5 million square feet.
  • Added 300 more delivery hubs, taking the total count to over 900.
  • Hired an additional 30,000 new staff just for the festive season.
  • Taken up intensive training programs for new staff to deliver the promised customer experience.
  • Ramped up its network of small retailers or Kirana stores to ease last-mile deliveries in remote areas.

Amazon India, on the other hand, is not far behind.

  • It now has over 50 fulfillment centres across 13 states with a total storage capacity of 20 million cubic feet. This is 1.5x of last year’s storage capacity.
  • It also has close to 30 sorting centres in 17 states with a processing area of close to a million square feet.
  • The company has expanded its network for national and regional transportation with an average of over 1,500 dedicated trucks on the road each day connecting more than 500 cities.
  • Worked with carrier partners to increase airport connectivity of cities by 1.5x since last year.
  • Has close to 150 delivery stations to support last-mile delivery.

In addition, the two companies are leveraging technology to improve their delivery efficiencies.

Innovating delivery

To handle high volumes, Bengaluru-based Flipkart launched a mobile app, FQuick, last year. The service allows people to sign up as freelance last-mile delivery executives. In just the last month, the company expanded this service to 40 cities.

In the upcoming Big Billion Day sale, Flipkart expects FQuick to contribute to almost 10% of its last-mile deliveries. It also sees close to 35% of all deliveries being fulfilled through this model.

“India can be looked at as ‘Many Indias’ as the market poses some very peculiar and complex challenges that are either absent completely in other markets or are highly limited,” Krishna Raghavan, Senior Vice-President at Flipkart, said. “Diversity in its geography, culture, languages, literacy levels, and income levels, to an extent that a service that may appeal to people in one region may fail to attract people all together in another, means a one-size-fits-all solution wouldn’t work in India.”

Amazon India, which has been running a similar programme called “I Have Space” since 2015, has expanded the service across 20,000 outlets in over 350 cities. It has also doubled its last-mile service partner network to about 500 cities and towns, a company spokesperson told Quartz in an e-mail.

“We have expanded our fulfillment network across [the] first-mile, middle-mile and last-mile operations and invested in technology to support faster movement of customer orders. Over 400,000 sellers will collectively offer over 170 million products and leverage the Amazon ecosystem,” the spokesperson said.

The move will help Amazon cater to customers beyond urban cities.

“Demand from tier II and beyond accounts for nearly 35% of sale during the festival season,” Mrigank Gutgutiya, engagement manager at RedSeer Consulting, said. “This year, the percentage is expected to go up because of schemes and marketing.”

Amazon has also equipped all its warehouses with the latest technology and automated the process to bring in better efficiency and faster deliveries. Flipkart has also started an overhaul of its warehousing, since early this year, but is currently focusing on automating the delivery and fulfillment process.

Spending big bucks

To build sophisticated infrastructure and processes, the two market leaders have made huge investments.

With Walmart backing Flipkart now, investments this year are at a record high. In May, America’s largest retailer picked up a 77% stake in Flipkart for $16 billion, marking the world’s largest e-commerce acquisition ever.

For instance, Flipkart invested Rs 3,463 crore into its online marketplace, Flipkart Internet, in September, just a month before the Big Billion Day sale. The company has also made steady investments in its logistics arm eKart and payments vertical PhonePe. Earlier this month, Flipkart invested Rs 961.4 crore in eKart. The company had made a Rs 452 crore investment in PhonePe in August and is now looking for external funding for the payments company.

In the coming months, Walmart will also make a fresh investment of around $2 billion in Flipkart as part of its $16 billion acquisition plan.

To compete with that, Amazon India invested Rs 2,700 crore into Amazon Seller Services, its marketplace business, in August. This is in addition to the Seattle-headquartered company’s commitment to invest $5 billion in its Indian arm over five years, which it has nearly concluded.

This article first appeared on Quartz.