Just after the lockdown was announced in the last week of March 2020 in India, the Ministry of Home Affairs announced that not only physical stores dealing in essential commodities will be allowed to open shop; for e-commerce companies too, the guideline issued mentioned that they could deal in essential goods only during the lockdown.
In a series of guidelines issued by the MHA then on, it was clarified that e-commerce companies and firms were being allowed to open their shops for the ordering of essential commodities while the non-essential commodities segment remained closed throughout.
Even though the e-commerce firms were prohibited from dealing with non-essential commodities, the fact that they were allowed to carry on with their home deliveries of essential goods throws light on the growing significance of this sector in the Indian economy.
The lockdown during COVID did come with its share of chaos where initially not much clarity was there amongst the public about how essential items like grocery, dairy products, drinking water, etc. would be supplied to their homes. When the e-commerce firms came into the picture, things got much smoother and easier because the entire purpose of the lockdown now looked like it could be realized successfully.
Purpose of the lockdown
The objective of the lockdown was to keep people home so that the spread of the disease could be kept under check. What the lockdown necessarily meant was that the common man should not be stepping out of their homes except in case of buying essential items. The more people stayed inside; the better could the purpose be solved.
Role of e-commerce companies during the lockdown
While the neighbourhood and the local kirana or grocery store were open, going out of home for people to buy the daily essential was about putting their health at risk. With children and elderly parents part of many households in India, it also meant risking the life of the family member. The best thing was to stay put at home and order online.
This is where e-commerce stores like Flipkart and Amazon came to the rescue of the common man. This seemed to be the safest way to stay indoors and yet ensure that the household requirements were addressed in the right manner.
Even though the grocery, pharmaceutical, and healthcare products sold accounted for a very minuscule percentage of online sales for big e-commerce platforms, most of them were happy to open their stores online during the lockdown.
It is important to note here that while in Lockdown 1 & 2, only essential commodities were allowed movement even for e-commerce companies, in Lockdown 3 from May 4th till 17th, these companies were allowed to sell and deliver all items in the orange and the green zones. Only in the red zones, the prohibitions continued as per the earlier two lockdown phases.
The immediate effect that was noticed in the orange and green zones was that people, though reluctant initially, went ahead and bought non-essential items like smartphones, makeup and cosmetics, grooming-related products, and apparel. Certain companies reported as much as a 50% surge in orders and sales in grooming and hair-related products like trimmers, shavers, dryers, and styling products from Tier 2 and 3 cities in May, compared to March.
It has been now felt that the digital medium and platform has played a crucial role in the way it has eased off some of the challenges that were being faced by the common man.
Opening of the lockdown and resumption of full services of e-commerce activities in India
In the days where the Unlockdown was announced, there was a feeling that the digital platform is going to play a significant role in the way the disease would be fought in the country. This is especially true in a situation where the government and health departments are focussing on social distancing. It is e-commerce that is going to be at the forefront of most commercial activities, in the B2C domain as well as the overall economy of the country.
When the fourth phase of Lockdown was announced in mid-may, many top e-commerce companies like Amazon, Firstcry, and Nykaa opened their full-services in orange and green zones. Some, however, were more cautious about opening all their services and products category.
State of affairs for e-commerce platforms that do not deal in essential commodities
The Lockdown caused some big areas of concern for e-commerce businesses that had nothing to do with the essential sector. Many big, medium, and small-scale firms working solely in the digital platform had no sales to register in the period from end-March to May 2020. For lakhs of online sellers (as per estimates approximately 5,00,000), the Lockdown meant an abrupt stop to sales and revenues. Without sales and revenues, another thing that hit most of the online sellers was the concern that their shipment on the way to the warehouse, or in the warehouse, could get damaged, and hence payments from clients could get further delayed or disrupted. To maintain an effective supply chain, the sellers had to pay their suppliers against raw materials and semi-finished products, which meant that suppliers had to be paid, on one hand; on the other, the payments against consignments that were shipped just before the lockdown were still not received from the clients.
Now, as the lockdown opens, things do not look hunky-dory for these sellers. With many of the stuck shipments returned to them, they do not expect to receive very many orders shortly from the customers – as a result, a financial meltdown seems inevitable. The future of many such businesses, especially those that are not in essential products, or deal in products that are not required for sustenance, things looks quite bleak at the moment.
It would not be unfair to say that the presence of top e-commerce companies helped most people who were following the lockdown guidelines, and was working from home. It also proved to be a boon because e-commerce facilitated people to sit or work at home, a study from home, make essential payments from home, and also entertain themselves through the digital medium, from home.