E-commerce essential for maintaining social distancing while facilitating eco revival: IAMAI

According to the latest guidelines, e-commerce companies will be allowed to operate.

A Snapdeal spokesperson also welcomed the guidelines for the e-commerce sector. (File Photo)

Digital commerce platforms can play a critical role in maintaining social distancing while facilitating economic revival in the country, industry executives said on Wednesday, welcoming the government's move to allow e-commerce operations amid the nationwide lockdown.

Under the first phase of lockdown between March 24 - April 14, the government had only allowed delivery of essential goods including food, pharmaceuticals and medical equipment through e-commerce platforms.

It has now been extended till May 3 and the government on Wednesday issued detailed guidelines for allowing select activities amid the lockdown.

According to the latest guidelines, e-commerce companies will be allowed to operate. Vehicles used by e-commerce operators will be permitted to ply with necessary permissions. However, it was not clear whether companies will be allowed to offer just essential or all kinds of products through their platforms.

An Amazon India spokesperson said the company is evaluating the guidelines and has sought clarifications from the authorities on its implementation.

"The resumption of economic activity from April 20 is a welcome step that would nonetheless depend on unhindered availability of labour that is critical to deliver essential products to people across the country and ensure they can stay home safely," the spokersperson said.

Paytm Mall Senior Vice President Srinivas Mothey said the government's decision has come at a very crucial time.

"This would help a host of non-essential goods merchants as they had to stop operations during this period of lockdown. We are already speaking to brands and our merchant partners so that they can go live with all categories on Paytm Mall.

"We believe that there is going to be a massive demand for electronics and mobile phones and accessories as many of our consumers have been reaching out to us to know when these categories would be live again," he said.

In the initial days of the first phase of lockdown, e-commerce companies had complained that they were being stopped by local authorities from making deliveries and had to get passes made for delivery staff.

A sudden surge in demand for essential items and less workforce being available for logistics and delivery had led to backlogs and delays in delivery for these platforms. These issues have now been ironed out to a large extent, according to industry executives.

A senior industry executive, who did not wish to be named, said concerns around cash flows and job security has impacted consumer sentiment across the world, including India.

The trend being seen globally is that they are holding back on big-ticket purchases and are using e-commerce platforms to buy only the needed items to get contactless delivery amid the coronavirus pandemic, and this is also what has been communicated to ministry officials by the industry, the executive said.

EY India Partner and National Leader - E-Commerce and Consumer Internet Ankur Pahwa said the government's move is the first step of returning to the 'new normal'.

"In this time of crisis, e-commerce companies have proved themselves to be an 'essential service' rather than the popular perception of 'luxury'. However, there are some challenges these companies will continue to face, that will take some time to overcome across the value chain from manpower availability to supply chain and fulfilment," he said.

Pahwa added that companies will also struggle in the near-term as consumer sentiment will be muted especially on discretionary spends, and companies will take time to reset their category and product mixes and ultimately manage unit economics at scale.

Industry body Internet and Mobile Association (IAMAI) welcomed the government's move, saying the decision to allow select activities will help relieve the economic distress and address concerns of the livelihood of the population.

"One e-commerce delivery person can help avoid 350 persons from visiting a retail store, and considering that the e-commerce platforms can cater to 75-100 million customers over 19,000 pin code areas, these platforms can prove to be critical tools of maintaining social distancing even while facilitating economic revival," it said.

Local administrators need to undertake a concerted effort for speedy implementation of the new orders to help ensure efficient operations of the permitted sectors in the coming days, it added.

Walmart-owned Flipkart said the group has been continuously working to ensure that customers have access to products.

"In line with the guidelines announced by the Government of India and also in collaboration with all State Governments & local authorities, we will continue to serve consumers to promote Social Distancing through our sanitised supply chain, contact-less deliveries and safe last mile delivery process," a Flipkart Group spokesperson said.

The spokesperson added that the company has been collaborating with the retail ecosystem, including kirana stores to ensure that customers can stay indoors.

A Snapdeal spokesperson also welcomed the guidelines for the e-commerce sector.

"At this critical juncture, the e-commerce industry can ensure that citizens stay indoors and all their needs are met through home deliveries with immense precautions. We look forward to serving the nation in protecting both lives and livelihoods," the spokesperson said.

IAMAI, which represents a number of digital companies across sectors like education and entertainment, also noted that the emphasis on establishments to maintain academic schedules through online teaching, permission for telemedicine services and manufacturing of IT hardware under industrial establishments are some of the positive steps that recognise the important role of the digital sector during this period of lockdown.