Indian e-commerce platforms say the government’s relaxation of certain measures during the ongoing Covid-19 lockdown has led to an increase in traffic on their websites. On May 1, the government extended the lockdown by two more weeks to May 17, but has allowed e-commerce platforms to sell both essential and non-essential goods in areas not affected by the virus.
The government has designated areas as red, orange and green zones depending upon the severity of the pandemic locally. Red signifies a high number of cases, orange a moderate number, and green areas have no reported cases. The classification will be reviewed on a weekly basis.
According to its new directive, e-commerce players will be allowed to deliver essential and non-essential items in designated orange and green zones. They will be permitted to sell items such as phones, laptops, electronic devices, apparel and appliances, which comprise most of their sales. However, the federal government will let the respective state governments decide what items can be sold.
The ongoing lockdown has hit e-commerce platforms very hard as it generates nearly 90% of its gross merchandise value from the sale of non-essentials. They have been allowed to sell groceries but it is a low-value and low-margin segment and therefore not enough to compensate for losses incurred due to the ban on the sale of non-essentials.
E-commerce companies have been selling goods such as groceries, medical supplies and baby food since March 25, when the lockdown was initially announced. Last month the government indicated that it would allow e-commerce delivery of both essentials and non-essentials, but later backtracked, saying that firms could deliver only essential items.
Walmart-owned Flipkart says it is now working with several sellers and micro, small and medium enterprises across India to help them resume operations in compliance with the government directives. It is providing constant online counsel and support to sellers.
Its rival Amazon has also welcomed the decision and it will allow millions of small and medium businesses and traders to resume doing business.
E-commerce firm Snapdeal also said traffic to its platform has been growing steadily since the government announcement. Apparel and household products topped the list for searches and orders placed. Almost all sellers on Snapdeal are third-party, independent sellers and a majority of its orders come from non-metro, tier-2 and tier-3 cities. Since most of these small cities fall into the green zone category, they expect orders to pick up in the coming days.
However, a traders’ body, the Confederation of All India Traders, has expressed concern, saying the e-commerce companies will misinterpret the ministry’s guidelines in their favor. It wants the government to allow the sale of non-essentials in retail stores for a few hours at night.
Industry bodies such as the National Association of Software and Services Companies and the Internet and Mobile Association of India have urged the government to expand the list of essential items to be sold during the lockdown. The former had urged the government to include laptops, mobile phones, accessories, computer hardware, webcams as essentials because people need them to work and study from home during the lockdown.
The Internet and Mobile Association of India had urged the easing of of e-commerce sales as it would help small offline and online sellers, direct to consumer companies and small and medium enterprises. It said that e-commerce can help the country do business while ensuring physical distancing.
Following the lockdown, millions of people in India are working and studying from home. Customers are searching for work-from-home essentials such as mobile phone charges, earphones, data cables and extension cords on the e-commerce websites. They are also looking for stationery products, fitness-related goods and personal grooming items.