Karnataka’s decision to permit e-commerce companies to ship all goods during a week-long lockdown starting Tuesday evening in capital Bengaluru, has come as a relief, said industry executives, as it takes the sting out of restrictions they face in other large markets such as Pune, Chennai and parts of Kolkata where only essential items are being allowed.
Bengaluru, one of the top three cities for e-commerce in the country, is an exception in a situation where some other states and districts have allowed online deliveries only of food, pharmaceuticals and a few other essential goods such as medicines.
These localised mini-lockdowns, industry executives and analysts said, could potentially dampen recovery of e-commerce sales across the country.
Pune, Chennai and Kolkata, as well as districts surrounding Mumbai, such as Navi Mumbai and Thane, where ecommerce firms are facing sustained disruptions, constitute some of the top markets for online ordering in the country.
“E-commerce is being allowed in Bengaluru for both essentials and non-essentials,” an industry executive said, confirming the development. “We will now see how the disruptions will be on the ground and accordingly decide on how to change our service-level agreements (SLA) with customers.”
Karnataka’s move to open up e-commerce completely even amid the lockdown will hopefully have a positive influence on other cities that are planning to go into lockdown soon, the executive added.
Earlier on Monday, Amazon India stopped accepting orders from customers in Bengaluru, anticipating curbs on the shipment of non-essentials, as Pune had done earlier as part of its 10-day lockdown that began Monday midnight.
Walmart-backed Flipkart, too, had begun displaying longer delivery times, of more than 10 days, on its website and app before Karnataka gave ecommerce firms a breather.
Executives in the two ecommerce marketplaces told ET that they would switch to accepting all orders. Amazon and Flipkart did not officially respond to ET’s queries till press time on Monday.
Ecommerce platform Snapdeal, however, told ET that it was actively working with local authorities to minimise the impact of some of the localised lockdowns.
“While we continue to accept orders across the entire assortment, the pick-up and deliveries of the same will be effected as per government guidelines and safe operating conditions,” a Snapdeal spokesperson said.
Analysts and executives, however, said the e-commerce industry would continue to face headwinds due to localised lockdowns, which seem to be the way forward given the rising cases of Covid-19 positive cases in the country.
“Lockdowns in different locations will not only impact demand given the lack of clarity on delivery of essentials/non-essentials, especially in the larger-demand cities, but also on supplies given the distributed logistics and warehousing most players have,” Ankur Pahwa, partner at EY, said. “This will be a continuing challenge to deal with for e-commerce players.”
Satish Meena, senior forecast analyst at Forrester Research, pointed out that localised lockdowns have come ahead of Raksha Bandhan and large sale events planned around Independence Day, which e-commerce companies had hoped would help claw back lost sales.
“These lockdowns are happening ahead of Raksha Bandhan, when e-commerce players were hoping to capture the demand for gifting that comes with it,” said Meena.
The e-commerce industry had recovered order volumes to pre-Covid-19 levels, while gross merchandise value of the industry had recovered by only around 65%, he estimated.
Micro-lockdowns in place in Navi Mumbai, Thane, Bhiwandi and a few regions in Uttar Pradesh and Haryana, have also hurt supply of goods since the warehouses that service e-commerce companies have shut down, industry players said. This has impacted order deliveries even into areas where there have been no restrictions, they said.
“Every district is making its own plans about what to allow and what to keep completely closed. Such last-minute changes impact sales and even supplies since many of our fulfilment centres are in some of the worst affected areas,” an executive at an ecommerce marketplace said.
Besides, states such as Madhya Pradesh, Uttar Pradesh, Tamil Nadu and Karnataka have also opted for weekend lockdowns, which delay deliveries, leading to an unsatisfactory experience from the customer point of view, industry experts said.
Leave a Reply