Coronavirus lockdown: Shadow looms over summer sales of Amazon, Flipkart

The nationwide lockdown has cast a shadow on the summer sales of e-commerce firms. According to multiple sources in the know, e-commerce majors, such as Amazon and Flipkart, are unlikely to conduct premier sale events next month because of the uncertainty created by the coronavirus disease (Covid-19) pandemic.
 

While Amazon India is learnt to have deferred its summer sale until further notice, sources said Flipkart doesn’t have clarity on the sale event yet. The Walmart-owned company anticipates that organising the event at a time when the entire country is battling the crisis on multiple fronts, will send a wrong message, they added.
 

“At this time, Amazon, along with our brand and seller partners, is completely focused on fulfilling customers’ most urgent needs and prioritising delivery of essential items. We are currently accepting new orders for essential items as per the guidelines of the government in more than 100 cities, while prioritising existing orders of essential products,” said Amazon India in an emailed response. Flipkart refused to comment to an email sent to it.
 

“How are you going to conduct the sale, when there are so many challenges of carrying goods from one part of the country and when you are not even able to supply basic things,” said an executive at an e-commerce company.
 

“E-commerce companies would be able to conduct the sale event only when the situation improves and they get clarity about what they would be allowed to sell. It would also depend on the purchasing power of consumers to buy new products,” the person added.
 

“Today it is not business as usual. Tomorrow if you come to know that consumers are not interested in buying new products, would you still run the event?” another executive associated with one of these e-commerce companies, said.
 

One of the biggest challenges that e-commerce companies are facing is the preparedness of sellers, which is usually done months in advance to keep stock ready. Industry sources said all of them are focused on supplying essentials and basic needs to consumers.
 

Many e-commerce sellers across the country have reached out to the government saying that they are facing huge losses and are asking it come up with a relief package to help the firms survive and pay employees’ salaries, according to the letters reviewed by Business Standard. They are also asking the government to enable the smooth functioning of e-commerce services.
 

Sellers such as Gujarat-based Leemboodi Fashion, which deals with ethnic wear, told the government in a letter that it had achieved 100 per cent business growth compared to last year via e-commerce. However, as a start-up it was facing challenges now.
 

“Our main concern is to pay salary and manage the vendor and IT payment service, which we cannot ignore. We (are) piled with stock (worth) crores, which is a major concern,” the firm said, requesting that the government classify its goods as essential supplies.
 

Another seller, B Bella Creation, which deals in ethnic wear told the government that the company was facing many challenges, including office and warehouse rents and the salaries of employees. “We request the government to provide relief during this lockdown,” said the seller.
 

Meanwhile, Ethnic Fashionista told the government that its money was blocked in stock, and it had no other source of revenue. “Because of the lockdown, we are not able to operate. We have manpower to serve and (our) stock is blocked. We request you to resume the operations for the non-essential categories,” said a seller based in Surat, Gujarat.
 

Many of these sellers are placing their grievances on platforms such as Change.org. “Due to Covid-19, a lot of us online sellers are going through a stressful time. With the sudden lockdown, we are left to pay salaries of employees, rent,” said M K Synthetics, which started a petition on Change.org. “Since e-commerce companies have a safety process in place for shipments, I would like to request the government to start e-commerce businesses from April 15,” said the company.
 

A Forrester research shows that the sector — dominated by mobile phones, electronics, and fashion-related products — is expected to see loss of sales of around $1 billion during the lockdown. Experts said on average, e-commerce firms are working at only 30 per cent of their capacity. These firms are facing supply issues and don’t have stock. Besides, many of their delivery executives have gone back to villages and small towns and it is difficult to bring them back.