E-tailers orange eye, green areas
Bangalore: Businesses are looking to start serving essential and nonessential item orders in the orange and green zones after the last order from the Home Office. This, even when some players seek more government clarity after a flip-flop last month.
Three industry sources said the ministry's order appears to have finally paved the way for e-commerce to sell all products, as well as offline stores. Due to multiple government clarifications in previous weeks, the latest notification from the Interior Ministry was reviewed by legal teams from Flipkart and, people aware of the matter said.
We welcome the government's decision to allow e-commerce in the orange and green zones to serve people safely with the products they need and have been unable to access due to the closure, an Indian spokesperson told TOI. In the red zones, e-commerce companies can only deliver essential products, including groceries, hygiene products, and medications. Amazon India said e-commerce companies should also be able to deliver other priority products in the red zone.
A Flipkart spokesperson declined to comment.
The new order comes as Amazon said it has seen the biggest impact of the virus outbreak in India on its international markets due to the government allowing the sale of essentials only through e-commerce, its global CFO. He was speaking during the earnings call from January to March on Friday. However, Amazon's global sales, led by the domestic market, the United States, reached a record.
Furthermore, data obtained last week from Marketplace Pulse, which tracks Amazon worldwide, showed that overall sales declined by 80-90% in Amazon India compared to the days before closing. The data also shows a sharp decline in sales compared to sales for the last holiday season and Christmas.
Amazon's international business, which has India, saw a four-fold increase in the last quarter to nearly $ 400 million compared to $ 90 million in the same quarter the year before. Both sales ($ 19 billion) and losses ($ 398 million) decreased sequentially compared to the quarter that ended in December 2019, when it reported sales of nearly $ 24 billion and losses of $ 617 million.
Groceries and other essentials typically contribute about 10% of total e-retailer sales here.
In its April 20 issue, TOI reported, citing Forrester estimates that e-commerce growth in India could drop to zero after the government changed its stance to allow online sales of non-essential products.
Even after the government's green signal for e-commerce in the green and orange zones, e-retailers may have to face a logistical challenge. Many e-commerce company stores and vendors rely on government-defined red zones in major cities. If we cannot take products from our warehouse in a red zone, how will it be delivered in other zones? This must be analyzed before e-commerce can practically open up, ”said an e-commerce executive.