E-commerce firms welcome govt's move to partially allow sale of non-essentials
The government allowed ecommerce companies such as Amazon and Flipkart to deliver both essential and non-essential items in districts categorised as green and orange zones in Lockdown 3.0 that begins May 4 and runs for two weeks.

However, they still can’t sell non-essential items in red zones, where their biggest markets are located. Taxis and cab aggregators can operate in green and orange zones with restrictions.

“Ecommerce activities will be permitted only for essential goods” outside containment areas in red zones, the Ministry of Home Affairs (MHA) said in revised guidelines issued on Friday evening.

A senior government official told ET that delivery of all products will be permitted in green and orange zones. The move will come as a relief to the platforms as well as their sellers and customers, although the biggest markets are still in the red zone.

“We welcome the government’s decision to allow ecommerce in orange and green zones to serve people safely with products that they need and have not been able to access due to the lockdown,” an Amazon spokesperson said. “Millions of small-and-medium businesses and traders will now be able to jumpstart their businesses and livelihoods across their workforce.”

It will take a while for the changes to take effect on the ground.

“It’s certainly not going to be business as usual, but this will be a slow path to an economic revival,” said an executive, who maintained that the MHA’s announcement was positive for the ecommerce industry. “It will take a few days before we really understand the kind of demand that exists in these markets and we will ramp up slowly.”

Big online retailers typically draw more than 90% of sales from non-essential items such as smartphones, electronics, appliances and apparel, and have been severely affected by the countrywide shutdown, unlike other countries where online commerce is operational and has surged as people stay away from stores. So far, ecommerce providers were allowed to deliver only essential items throughout India.

Read: Non-essentials sales curb could pinch ecomm firms hard

While companies welcomed the move, they said that with more than 50-60% of sales coming from metros and large cities, which are mostly in the red zone, business will continue to be impacted. These include Mumbai, Delhi, Kolkata, Hyderabad, Pune, Bengaluru and Ahmedabad, all designated as red zones.

“Huge demand comes from customers in red zones for non-essentials. We are hopeful that the essentials list gets expanded so that more items can be sold in these areas as well,” said an online commerce firm executive.

A Snapdeal spokesperson said the move will help spark a gradual recovery by enabling sellers and micro, small and medium enterprises (MSMEs) to cater to customers through online and offline channels.

An executive at an ecommerce firm with a wide base of customers and sellers in tier 2 and 3 towns said it expects sales to perk up as there’s pent-up demand in these markets as well.

“India has been working, studying and staying indoors for quite long now,” said Srinivas Mothey, senior vice president, Paytm Mall. “They are running low on supplies of several items including laptops, mobile phones as well as accessories, computer hardware, books, stationery, and even basic summer wear.”

Mothey said many consumers have been eagerly waiting for some relief in lockdown guidelines to buy air conditioners and refrigerators as summer temperatures rise.

“This is exactly what the (ecommerce) industry was asking from the government–allow us to resume operations in all regions where it can be carried out safely,” said a senior executive at a leading ecommerce company. “Even we need to maintain safety of our staff, which is why operations not being allowed in red zones is not such a big issue.”

Sources close to Amazon said the company will take a staggered approach and first open up priority products such as work-from-home and be-at-home essentials, and those that have been most searched by consumers lately.

“Luxury products like expensive bags and perfumes will not be given a green light immediately,” one of them said.

Deliveries in green and orange zones will be allowed between 7 am and 7 pm, as per the MHA guidelines for non-essential services. Further, companies said they will benefit from wider workforce availability as movement passes for staff will no longer be required in these areas.

There will be no movement of people into or out of containment zones within red and orange zones, except for medical emergencies and maintaining the supply of essential goods and services, the ministry said.

The zones are classified based on coronavirus infection data. As of April 30, 130 districts were in the red zone, 284 in orange and 319 in green.

Cab aggregators

Besides online deliveries, the government has opened up cab aggregator services in orange and green zones as well besides allowing other forms of travel.

“In the orange zones, taxis and cab aggregators will be permitted with one driver and one passenger only. Inter-district movement of individuals and vehicles will be allowed for permitted activities only. Four-wheeler vehicles will have maximum two passengers besides the driver and pillion riding will be allowed on two-wheelers.”

Executives at mobility startups Ola and Uber indicated that while the guidelines open up orange and green zones, a bulk of their business comes from the top seven metros, which are still shut to such services. Food delivery apps Swiggy and Zomato, however, may be able to open services in some smaller towns and cities now.

Amazon cited curbs on ecommerce as the reason for its business in India being worst hit by the pandemic, even as the American giant recorded a surge in overall revenue for the first quarter of 2020.





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