Ecommerce Giants Look To Rebuild Capacity As Delivery Of Non-Essentials Resumes

After multiple rounds of requests, ecommerce companies are now finally allowed to deliver non-essential products across the country, except in containment zones. The central government in its guidelines on Sunday said that all activities, except those specifically prohibited, will be now be opened up. However, the nearly two-month-long lockdown has deeply impacted operations of ecommerce players and the first order of business would be to rebuild the supply chain and the fulfilment capacity.

While many states are yet to take the final call on allowing businesses to function, which they will based on the local needs and the on-ground situation, online sales will continue to be restricted to essential products in the critical containment zones across the country. Several states like Delhi, Kerala, Tamil Nadu, Punjab among others backed the guidelines and allowed the delivery of non-essentials via ecommerce.

Amazon, Flipkart Sort Out Supply Chain Issues

An Amazon spokesperson said it welcomes the government’s move to allow ecommerce firms to deliver non-essentials to all places outside containment zones in lockdown 4. It said this will help them deliver a wider selection of products maintaining precautions and social distancing.

“This will give a fillip to the 6 lakh retailers and MSMEs on our marketplace and help revive economic activity more broadly. We remain committed as always to ensuring the safety of our customers and our employees while creating business and employment opportunity,” an Amazon spokesperson said.

A Flipkart spokesperson said earlier in the day that it will await the advisories from different states. “We will continue to work in accordance with the directives from the government and local authorities while serving customers, sellers through our safe supply chain,” a Flipkart Group spokesperson said.

“At the Flipkart Group, our supply chain team continues to play a critical role in helping consumers with all their requirements, as they maintain social distancing and prefer to stay indoors,” the spokesperson said.

The spokesperson added that the company is working with lakhs of MSMEs and sellers across India to provide them with constant counsel and help with their business readiness, and is following safety and health procedures at its facilities and for supply chain and delivery staff.

Will Ecommerce Demand Bounce Back?

The relief for ecommerce companies come after months of requests and failed plans of delivering non-essentials. In second-phase of lockdown, Prime Minister Narendra Modi had said that if the situation in certain areas improves after April 20, certain activities may be allowed. However, in an order dated April 19, MHA said that it is revoking the clause that could have allowed ecommerce companies and their vehicles to operate after April 20.

Further, on April 26, the government allowed retail shops selling non-essential items to open, while still not letting ecommerce companies operate for non-essential deliveries. LocalCircles survey recently said that the demand for non-essentials could be short-lived as a majority of consumers would refrain from spending on non-essential items.

The survey showed that 74% of the respondents would not spend on anything apart from essentials even after restrictions are relaxed. Over the last few months of restrictions, the consumer spending has been hugely limited and unemployment is on the rise as well. So even as ecommerce companies get back to normal business, whether they will be able to sustain a lack of demand or not is yet to be seen.