E-commerce Companies May See Relieve amid Lockdown 3.0

The government has eased some restrictions for e-commerce companies, allowing them to deliver essential, as well as non-essential items, in green and orange zones
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

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  • May 02,2020
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  • 14 Mins Read

In the wake of rising Coronavirus-inflicted patients, the Indian government has proclaimed to extend lockdown in the country. The Lockdown 3.0 will commence from May 4 and will continue for the coming two weeks. The government has eased some restrictions for e-commerce companies, thus, allowing them to deliver essential, as well as non-essential items, in districts classified as green and orange zones from May 4 onwards. 

However, the e-commerce platforms still cannot sell non-essential commodities in red zones, where big markets are located. Taxis and cab aggregators will operate in green and orange zones with restrictions, reported The Economic Times. 

"Ecommerce activities will be permitted only for essential goods" outside containment areas in red zones, the cited media agency reported the Ministry of Home Affairs' (MHA) revised directives. 

"Delivery of all products will be permitted in green and orange zones. The move will come as a relief to the platforms as well as their sellers and customers, although the biggest markets are still in the red zone," a senior government official said in an interview with The Economic Times.

"We welcome the government's decision to allow ecommerce in orange and green zones to serve people safely with products that they need and have not been able to access due to the lockdown," the Amazon spokesperson informed the cited media agency.  

"Millions of small-and-medium businesses and traders will now be able to jumpstart their businesses and livelihoods across their workforce," the spokesperson added. 

Unprecedented Consumer Preferences 

Sales of non-essential items engender over 90 per cent of revenue for the online retailers. In foreign nations, e-commerce companies are fully operational and selling essential as well as non-essential commodities. Amid the lockdown, the e-commerce companies have witnessed an increase in sales numbers whilst in India, the image is purely opposite. Owing to restrictions, masses have to purchase essential items only which, in turn, has severely affected the market of non-essential items. 

"It's certainly not going to be business as usual, but this will be a slow path to an economic revival," an executive, who held positive hopes for the e-commerce niche after MHA's announcement, told the cited media agency. 

"It will take a few days before we really understand the kind of demand that exists in these markets and we will ramp up slowly," the executive added. 

The government's revised guidelines have not been implemented on the ground level. 

According to the cited media report, the Indian companies have acknowledged the government’s decisions. However, they have stated that over 50-60 per cent of sales are coming from metropolitan and big cities that are mostly categorised as red zones. This will badly impact the business. Some of these cities are Hyderabad, Kolkata, Bengaluru, Ahmedabad and Pune that are currently termed as red zones by the MHA.

"Huge demand comes from customers in red zones for non-essentials. We are hopeful that the essentials list gets expanded so that more items can be sold in these areas as well," an executive from an online e-commerce firm told The Economic Times. 

"The move will help spark a gradual recovery by enabling sellers and micro, small and medium enterprises (MSMEs) to cater to customers through online and offline channels," Snapdeal spokesperson informed the cited media agency. 

"India has been working, studying and staying indoors for quite long now,"  Srinivas Mothey, Senior Vice President at Paytm Mall, informed the cited media agency. 

"They are running low on supplies of several items including laptops, mobile phones as well as accessories, computer hardware, books, stationery, and even basic summer wear," Mothey added. 

Summers are approaching in the country and with the new season, demand for air conditioners and refrigerators will emerge as the temperature will begin rising.

"This is exactly what the (ecommerce) industry was asking from the government--allow us to resume operations in all regions where it can be carried out safely," a Senior Executive of the leading e-commerce firm told the cited media agency. 

"Even we need to maintain safety of our staff, which is why operations not being allowed in red zones is not such a big issue," the executive added.

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