The government has allowed e-commerce companies such as Amazon, Flipkart and Snapdeal to deliver both essential and non-essential items in districts categorised as green and orange zones during Lockdown 3.0 that begins today and runs for two weeks.
The move has come as a relief to the platforms as well as their sellers and customers. However, they still can’t sell non-essential items in red zones, where their biggest markets are located.
Under the latest rules, e-commerce activities in red zones, which cover large cities like Delhi, Mumbai, Bengaluru, Pune and Hyderabad, are permitted only for essential goods which include grocery, hygiene products, and medicines.
“Ecommerce activities will be permitted only for essential goods” outside containment areas in red zones, the Ministry of Home Affairs (MHA) said in its revised guidelines issued in the evening of May 1.
“We welcome the government’s decision to allow e-commerce 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,” an Amazon spokesperson said. “Millions of small-and-medium businesses and traders will now be able to jumpstart their businesses and livelihoods across their workforce.”
Amazon, during its first quarter results stated that their India business has dealt with maximum impact due to the covid-19 crisis. Last month, e-commerce businesses were in for a rude shock after the MHA rolled back the order allowing businesses to sell non-essential items online.
Big online retailers typically draw more than 90% of sales from non-essential items such as smartphones, electronics, appliances and apparel, and have been severely affected by the countrywide shutdown, unlike other countries where online commerce is operational and has surged as people stay away from stores. So far, e-commerce providers were allowed to deliver only essential items throughout India.
“It’s certainly not going to be business as usual, but this will be a slow path to an economic revival,” said an executive, who maintained that the MHA’s announcement was positive for the e-commerce industry. “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.”
Walmart-owned Flipkart said it is working with lakhs of sellers and micro, small and medium enterprises (MSMEs) across India and helping them prepare their businesses resume operations.
While companies welcomed the move, they said that with more than 50-60% of sales coming from metros and large cities, which are mostly in the red zone, business will continue to be impacted.
“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,” said an online commerce firm executive.
A Snapdeal spokesperson said the move will help spark a gradual recovery by enabling MSMEs to cater to customers through online and offline channels.
“For us, the tier I and tier II cities/districts that are under the green and orange zone drive maximum of our sales, for the brand Telefunken and Shinco, so indeed it’s a bit of a relief,” Arjun Bajaj, Director at Videotex International Group said. “Parallel we are preparing our service centres for the back end and, and would be following the mandatory guidelines like social distancing measures which are necessary at the time of installation and repair.”
Srinivas Mothey, Senior Vice-President at Paytm Mall said the company has already had discussions with its suppliers, logistics partners, and most importantly, offline shopkeeper base and they are all set to go online.
Mothey added that they would be going live with key consumer demand categories like consumer electronics, laptops, home and fashion. “These verticals and catalogs would be open to our customers besides continuing essentials. We would be taking new orders for non-essentials from Monday, May and deliver in all green and orange zones.”
Mothey said most of its sellers in non-essential categories have confirmed their preparedness by updating their inventory and would be starting to go live on May 4 and the rest will follow suit over the coming week as zonal restrictions ease.
“We have extended their processing times to pack and ship products by 2-3 days buffer, relaxed SLAs (service-level agreements), and penalty conditions on order processing temporarily. We are in the process of getting inventory updated and cataloguing their stock keeping units (SKUs) on the platform. Our logistics partners are in touch with them and will start the process of deliveries soon as we start getting orders,” Mothey added.
Meanwhile, sources close to Amazon said the company will take a staggered approach and first open up priority products such as work-from-home and be-at-home essentials, and those that have been most searched by consumers lately.
“Luxury products like expensive bags and perfumes will not be given a green light immediately,” one of them said.
Deliveries in green and orange zones will be allowed between 7 am and 7 pm, as per the MHA guidelines for non-essential services. Further, companies said they will benefit from wider workforce availability as movement passes for staff will no longer be required in these areas.
There will be no movement of people into or out of containment zones within red and orange zones, except for medical emergencies and maintaining the supply of essential goods and services, the ministry said.
The zones are classified based on coronavirus infection data. As of April 30, 130 districts were in the red zone, 284 in orange and 319 in green.