India's e-commerce sector comes to halt due to lockdowns

Government of Karnataka and Maharashtra have now put out an order saying that e-commerce shall be excluded from the restrictions to prevent the spread of Covid-19.

The Indian e-commerce sector has come to a halt across the country including the supply of essential commodities due to various lockdowns to prevent the spread of Covid-19, according to the e-commerce industry executives. They said there is a lot of police action on the ground and even the interstate movement has been stopped due to which lot of essential items on platforms such as Flipkart, Amazon, Grofers and Milkbasket are not reaching the people. Even food-delivery firms such as Swiggy and Zomato are facing similar challenges due to various lockdowns, according to the sources.

“There is a lot of ambiguity and uncertainty. The authorities keep coming up with circulars which are contradictory to the previous ones,” said an e-commerce industry executive. “It is more a miscommunication issue due to which there are many challenges that companies such as Flipkart, Amazon, Grofers and Swiggy and Zomato are facing on the ground.”

E-commerce companies are facing challenges in delivering essential items such as rice, wheat, pulses, baby food, dairy and fruits and vegetables. The other important items include hygiene products such as soaps, sanitary pads, sanitisers and masks. As most of the people are working from home, e-commerce industry insiders said that the firms are also finding it a challenge to deliver products such as power banks, laptops, routers, headsets and tables and chairs to the customers, despite a tremendous increase in demand.

The Government of Karnataka on Monday put out an order saying that e-commerce and home delivery come under essential services and shall be excluded from the restrictions imposed by the government to contain the spread of Covid-19. Government of Maharashtra on Monday also put out an order saying that e-commerce services providing essential goods including pharmaceutical and medical equipment, should be excluded from the restrictions.

According to the sources, other than essentials which are witnessing huge demand, the rest of the e-commerce categories are witnessing at least 60 per cent drop in sales. “But the issue the e-commerce companies are facing for essentials is replenishment and last mile-delivery,” said a person.

Milkbasket, a Gurugram-based daily grocery delivery service said the company’s staff, vendors and vehicles are being pushed back from the roads by local police, disrupting the operations. “Yesterday we had to cancel thousands of orders. We could only operate at 40 per cent capacity in Gurgaon. Even lower in Noida. We might have to cancel all the orders today, impacting over 150,000 families across 4 cities,” said the company on Monday. “We are being told to shut down our distribution centers.” The company urged the authorities to look into the matter and support the firm in ensuring smooth service.

Online grocery firm Grofers said as per the directive of the central government, the firm continued to provide essential goods to customers across the country on the day of Janta Curfew. However, due to some confusion regarding the services exempted, many of its delivery riders were stopped and arrested which led to a delay in the delivery of almost 60,000 orders countrywide.

“This does not only affect the morale of the delivery staff who are working selflessly to support people but is also causing inconvenience to many customers who are relying highly on our services,” said Albinder Dhindsa, co-founder and CEO of Grofers, which is backed by SoftBank. Furthermore, in a few states including Maharashtra, it is also facing forced shut down of warehouses in these difficult times. “Our teams are working relentlessly to support people and managing deliveries to avoid any kind of panic among consumers and we request authorities to take measures to ensure that the process of essential items delivery remains smooth,” said Dhindsa.

Saurabh Kumar, another co-founder of Grofers on Monday said on Twitter that despite assurances that grocery is an essential service and Grofers should continue to operate, police and local authorities keep shutting the warehouses. “All the proactive initiatives of (the) government and central authorities (are) going to waste because of overzealous enforcement agencies,” said Kumar. He said for every facility that gets shut the risk is that many households would venture out for grocery buying.

E-commerce firms are requesting State governments to resolve various issues. This includes movement of goods for e-commerce by trucks plying State and Inter-state. There are letters issued by the companies to the truckers, which need to be accepted by the authorities. These letters say that the products are for e-commerce service delivery ensuring families are getting what is essential for them to have at home “during isolation so they don’t have to leave their homes,” said a person who did not wish to be quoted. The firms are also requesting for the opening of multi-products warehouses, distribution and sort centres. Also safe movement of personnel for e-commerce activities after showing the letters given by the online retailers and govt-issued identification documents. “We request for a strong coordinating mechanism between Central and State governments to ensure that these guidances are percolated down to the ground level,” said an e-commerce industry executive.

The companies are also asking to allow the operations of the necessary customer and IT support and movement between home and office for operations and logistic services.

In response to a query from Business Standard, Walmart-owned Flipkart said while its teams are working with Center as well as State authorities to ensure that it continues to serve the communities, there are operational issues on-ground. “These impact our ability to seamlessly service the communities as they stay indoors. We are working with the Central and State government as an industry to solve these challenges,” said a Flipkart Spokesperson. “We are confident that together we not only can fight this challenge but also ensure that customers and communities have access to essentials in this battle. At Flipkart we are confident that by leveraging technology and supply chain expertise, we can contribute meaningfully,” said the spokesperson.