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.