Ecommerce Hit By Coronavirus Epidemic: Will Price Surge Follow?

Ecommerce Hit By Coronavirus Epidemic: Will Price Surge Follow?

SUMMARY

Amazon and Flipkart are facing a shortage of finished products

The shortage in the supply chain might increase the prices of products

Both ecommerce companies are trying to handle the situation

As most manufacturing plants in China are on a near-complete shut down because of the coronavirus outbreak, the shortage of finished products, especially electronic goods, has now hit major ecommerce marketplaces operating in India.

Both Amazon and Walmart-owned Flipkart are facing problems in the supply chain when it comes to best-selling categories such as smartphones and large appliances. An ET report citing sources said that although the impact is not that severe yet, the effect would soon start to hamper the online sales by mid-April which might even lead to an increase in prices.

Besides acting as an online marketplace, Amazon and Flipkart also have set up subsidiaries to sell products of private label brands such as MarQ, AmazonBasics, Smartbuy and Solimo to sellers which sell back these products on respective ecommerce platforms.

Ecommerce Sales To Slow Down?

As most of the products of these brands are manufactured in China, the impact of coronavirus is also expected to hit the supply chain of these products. The crunch in the supply chain is expected to further hamper the businesses of Amazon and Flipkart.

Moreover, the woes for Amazon and Flipkart further didn’t stop here as many sellers on the platform are also finding difficulties in sourcing their products from China. Additionally, a few of the large appliance brands such as Samsung and LG are from South Korea which is the second most-impacted country due to coronavirus. These big brands are now trying to bring back their manufacturing on track in markets other than China.

For Amazon, the problem is not limited to India as almost 50% of their sellers are from China for its global business. Walmart is also expected to start feeling the pressure of the supply crunch soon.

Sellers on Amazon and Flipkart are also tapping markets other than China to bring their products to India. However, they are getting it at higher prices which might result in lower sales of these products on Amazon and Flipkart, since customers are unlikely to want to pay for the increased import cost.

A Flipkart spokesperson said that while the company hasn’t witnessed any major impact yet, it is in touch with its seller partners. On the other hand, Amazon also said that the company is also taking appropriate actions to tackle this situation.

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Ecommerce Hit By Coronavirus Epidemic: Will Price Surge Follow?-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Ecommerce Hit By Coronavirus Epidemic: Will Price Surge Follow?-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Ecommerce Hit By Coronavirus Epidemic: Will Price Surge Follow?-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Ecommerce Hit By Coronavirus Epidemic: Will Price Surge Follow?-Inc42 Media
Ecommerce Hit By Coronavirus Epidemic: Will Price Surge Follow?-Inc42 Media
You’re in Good company